The URL can be used to link to this page

Home My WebLink About031725 agenda packetREGULAR MEETING Date: Monday, March 17, 2025 Time: 6:00 p.m. Location: Commissioners Meeting Room Harnett County Resource Center & Library 455 McKinney Parkway, Lillington Harnett County Board of Commissioners Page | 1 1.Call to order – Chairman Matt Nicol 2.Pledge of Allegiance and Invocation – Commissioner Eddie Jaggers 3.Consider additions and deletions to the published agenda. 4.Consent AgendaA.Minutesi.Regular Meeting Minutes of March 3, 2025ii.Work Session Minutes of March 11, 2025B.Harnett County Health Department requests approval to accept 123 Investment in PerformanceManagement Funding in the amount of $12,190 from NC Department of Health and HumanServices (DHHS). These were issued by North Carolina Division of Public Health to enhance andstrengthen performance management, and quality improvement in local health departments.C.The Department of Social Services (DSS) requests the approval to use the remaining amount ofDisplaced American Relief Plan Act (ARPA) funding that was designated for the DSS upfit topurchase furniture. We would like to purchase furniture for the remaining offices in our mainbuilding. This would complete the renovation of DSS. The cost of the desks and installation are$85,145. The amount of ARPA funding remaining for the upfit is $95,736.D.Veterans Services requests approval to apply for a $20,000.00 NC Department of Military andVeterans Affairs (DMVA) Grant for County Veterans Offices. Grant funds can be used for trainingand education, conferences, compensation for personnel service, office supplies and publicrelations. E.The Finance Officer requests that the Harnett County Board of Commissioners approve the contract with Martin Starnes & Associates, CPAs, P.A. for the completion of the County's required audit for the fiscal year ending June 30, 2025. F.The Legal Department requests the approval of a Pepper Spray policy. The purpose of the policy is to provide guidance to eligible non-law enforcement employees of the County regarding the possession and use of County-issued Pepper Spray in the course of their employment.G.Harnett Regional Jetport requests the Board of Commissioner approve a work authorization for the work to conduct the necessary Pre-NEPA studies. Harnett County received a $15.6 million grant to extend the existing runway by 500 feet. The first step of the project is to conduct Pre- NEPA studies for project approvals. Parrish and Partners, our engineer of record, has prepared a scope of work to conduct the necessary Pre-NEPA studies. The work authorization for the HCBOC 031725 Pg. 1 Harnett County Board of Commissioners Page | 2 studies is presented to the board for review and approval. The cost of the study work is $107,024.00. The cost of the study will be paid with grant funding. 5.Public Comment Period Period of up to 1 hour for informal comments allowing 5 minutes for each presentation. Speakers are requested to sign up prior to the meeting. Speakers may sign up by contacting the clerk at mdcapps@harnett.org at least one hour prior to the start of the meeting or by utilizing the signup sheet atthe back of the room. The signup form will be picked up by the clerk 5 minutes before the publishedmeeting start time. 6.Public Hearing – Proposed Text Amendment: Case # PLAN 2501-0002 Applicant: Harnett County Development Services; Harnett County Unified Development Ordinance; Article IV “Zoning & Overlay Districts” Section 2.0 “Zoning Map”. 7.Public Hearing – Proposed Text Amendment: Case # PLAN 2502-0001 Applicant: Harnett County Development Services; Harnett County Unified Development Ordinance; Article III “Development & Subdivision Review, Permitting & Approval Requirements” Section 8.2.3 “Subdivision & Plat Requirements” & 8.4.1 “Review for Minor Subdivision” 8.Public Hearing concerning entering into an installment financing contract in an amount not to exceed $91,000,000 to finance the construction, equipping, and furnishing of school facilities in the County (the “2025 Project”), including, but not limited to, Flatwoods Middle School and executing and delivering a Deed of Trust, Security Agreement and Fixture Filing (the “Deed of Trust”) related to the County’s fee simple interest in the School, together with the improvements and fixtures thereon as may be required by the entity providing the funds to the County under the Contract. 9.Consider the adoption of a Resolution approving an installment financing contract and delivery thereof and providing for certain other related matters as it relates to the construction of a new middle school (Flatwoods Middle School). 10.County Manager’s Report – Brent Trout, County Manager A.Harnett County Department of Public Health Monthly ReportB.Harnett County Veteran Services Monthly ReportC.Interdepartmental Budget AmendmentsD.Budget Amendments – Motion to approve budget amendments as requested by the FinanceOfficer HCBOC 031725 Pg. 2 Harnett County Board of Commissioners Page | 3 E.Resolution requesting NC Department of Transportation add SR1364 Joseph Alexander Drive inBallard Woods Subdivision to the to the State’s Secondary Road System – Motion to approve Resolution 11.New Business 12.Closed Session 13.Adjourn CONDUCT OF THE MARCH 17, 2025 MEETING Livestream of the meeting will be on the Harnett County Government’s YouTube Channel at https://www.youtube.com/channel/UCU7mTF6HTD65x_98EhAMeMg/featured. HCBOC 031725 Pg. 3 Harnett County Board of Commissioners Regular Meeting Minutes March 3, 2025 Page 1 of 3 HARNETT COUNTY BOARD OF COMMISSIONERS Regular Meeting Minutes March 3, 2025 The Harnett County Board of Commissioners met in regular session on Monday, March 3, 2025 at 9:00 am, in the Commissioners Meeting Room, Harnett County Resource Center and Library, 455 McKinney Parkway, Lillington, North Carolina. Members present: Matthew B. Nicol, Chairman William Morris, Vice Chairman Barbara McKoy, Commissioner W. Brooks Matthews, Commissioner Duncan “Eddie” Jaggers, Commissioner Staff present: Brent Trout, County Manager Dwight Snow, County Attorney Kimberly Honeycutt, Finance Officer Melissa Capps, Clerk Chairman Nicol called the meeting to order at 9:00 am. Commissioner Jaggers led the Pledge of Allegiance and provided the invocation. Chairman Nicol called for any additions or deletions to the published agenda. Vice Chairman Morris made a motion to approve the agenda as published. The motion was seconded by Commissioner Matthews and carried unanimously. Vice Chairman Morris made a motion to approve the consent agenda. Commissioner Jaggers seconded the motion. The motion passed unanimously. The items on the consent agenda were as follows: A.Minutes i.Regular Meeting Minutes of February 17, 2025 ii.Work Session Minutes of February 25, 2025 B.Adopt a Resolution Supporting NC Division of Juvenile Justice and Delinquency Prevention Legislative Requests for Increased Recurring State Funding for Juvenile Crime Prevention Councils (JCPC). (Attachment 1) C.Parks and Recreation requests the acceptance of the high bid for the thinning and regeneration harvest of 476.3 acres at Anderson Creek Park and to direct staff to enter into necessary contracts for the completion of the project. The high bid is from Canal Wood- Laurinburg at $7.83 per blended ton. D.Emergency Services is requesting approval of the fireworks application from Pyro East Coast, Inc. for Campbell University's Baseball season fireworks displays. East Coast Pyrotechnics meets all requirements; along with fire code compliance for the events. The events will take place on 3/21, 4/4, 4/25 and 5/9, all showtimes will be 9:00 p.m. Item Ai HCBOC 031725 Pg. 4 Harnett County Board of Commissioners Regular Meeting Minutes March 3, 2025 Page 2 of 3 E. The Finance Officer requests the Board adopt a Resolution Authorizing the Negotiation of an Installment Financing Contract for the Construction of Flatwoods Middle School, Directing the Publication of Notice with Respect Thereto, Declaring the Intent of the County to Reimburse Itself for Capital Expenditures from Proceeds Thereof, Providing for Certain Other Related Matters Thereto. (Attachment 2) F. Veteran's Farm of NC, Inc is requesting a reimbursement of system development and tap fees in the amount of $21,000. The reimbursement would be for five connections to our system for homes they are building on their property. They are currently developing a housing area for veterans that are working on the farm. If the board approves the reimbursement of these fees a payment of $21,000 will be paid from Veteran's Farm to Harnett Regional Water and then the general fund of the County will reimburse the Veteran's Farm. G. The Harnett County Board of Commissioners would like to reappoint Donna Wood, District 5 member, to the Harnett County Planning Board. Vice Chairman Morris presented Scott Tart and family with a plaque in grateful appreciation of their heartfelt donation to those affected by the floods in Western North Carolina. Chairman Nicol opened the meeting for informal comments by the public, allowing up to 5 minutes for each presentation up to 1 hour. The following people provided comments: 1. Larry Mitchell of 478 Century Drive, Cameron, NC. 2. Jerry Rivas of 364 Twin Ponds Road, Sanford, NC. 3. Lenny Kaluzny of 5351 Marvin Drive, Spring Lake, NC. 4. Kate Reichert of 6711 River Road, Fuquay Varina, NC. 5. Rebekah Brock of 5220 Christian Light Road, Fuquay Varina, NC. No one else spoke and the public comment period was closed. Commissioner McKoy asked where are we with the Nonprofit Committee and the bylaws? Brent Trout, County Manager, stated at the last budget discussion, the Board decided not to pursue with granting funding to any of the nonprofits and so a committee was not formed. We stand ready if the board chooses to create such funding and create the committee if the board determines that is what they would like to do. Commissioner McKoy stated I would certainly like for it to be brought back to the board and I don’t remember voting it down. Mr. Trout stated you are right, there was no vote down, through the discussion with the budget, no one said let’s put funding towards the nonprofit organizations. Commissioner McKoy stated I would ask that we revisit that, if this board is going to give money to nonprofits, we should have something in place. Chairman Nicol stated we can rediscuss the committee and decide what it looks like if we decide to reapproach that. Commissioner Jaggers asked that we add a litter discussion to the work session next week. Mr. Trout shared Commissioners Brooks Matthews and Duncan Eddie Jaggers will be hosting a Town Hall Meeting on Tuesday, March 11, 2025, at 6:00 p.m. at the Angier Depot. Mr Trout also shared information regarding a place to dispose of sharps such as needles located at the health department. HCBOC 031725 Pg. 5 Harnett County Board of Commissioners Regular Meeting Minutes March 3, 2025 Page 3 of 3 Vice Chairman Morris made a motion to approve the budget amendments as requested by the Finance Officer. The motion was seconded by Commissioner Jaggers and carried unanimously. (Attachment 3) Mr. Trout reviewed a request for the Board to consider adopting a Resolution confirming the creation of America 250 NC County Committee. This is an opportunity from the Department of Cultural Affairs of North Carolina. They are providing grants to counties to create exhibits and other types of ways to celebrate the 250th anniversary of the signing of the Declaration of Independence. Commissioner Matthews read the Resolution. Vice Chairman Morris made a motion to adopt a Resolution confirming the creation of America 250 NC County Committee. The motion was seconded by Commissioner Jaggers and carried unanimously. (Attachment 4) Kimberly Van Beck, Library Director, reviewed a request for approval to accept four separate ALA Libraries Transforming Communities (LTC): Accessible Small and Rural Communities Grant Awards, each in the amount of $10,000. These funds are designated for use at the Angier Public Library, Benhaven Public Library, Coats Public Library, and Dunn Public Library. The purpose of these grants is to support projects aimed at making the municipal buildings at each of these branch libraries ADA compliant. Specific improvements will include ADA-compliant parking and doorframe upgrades to ensure greater accessibility for all patrons. There are no matching funds required. Commissioner Jaggers made a motion to approve the acceptance of four separate ALA Libraries Transforming Communities (LTC): Accessible Small and Rural Communities Grant Awards, each in the amount of $10,000. The motion was seconded by Vice Chairman Morris and carried unanimously. Vice Chairman Morris made a motion to adjourn at 9:34 am. The motion was seconded by Commissioner Jaggers and carried unanimously. ____________________________________ ___________________________________ Matthew B. Nicol, Chairman Melissa Capps, Clerk HCBOC 031725 Pg. 6 Attachments HCBOC 031725 Pg. 7 HCBOC 031725 Pg. 8 HCBOC 031725 Pg. 9 HCBOC 031725 Pg. 10 HCBOC 031725 Pg. 11 HCBOC 031725 Pg. 12 HCBOC 031725 Pg. 13 HCBOC 031725 Pg. 14 HCBOC 031725 Pg. 15 HCBOC 031725 Pg. 16 HCBOC 031725 Pg. 17 HCBOC 031725 Pg. 18 HCBOC 031725 Pg. 19 HCBOC 031725 Pg. 20 HCBOC 031725 Pg. 21 HCBOC 031725 Pg. 22 Harnett County Board of Commissioners Work Session Minutes March 11, 2025 Page 1 of 5 HARNETT COUNTY BOARD OF COMMISSIONERS Minutes of Work Session March 11, 2025 The Harnett County Board of Commissioners met in work session on Tuesday, February 11, 2025 at 9:00 am, in the Commissioners Meeting Room, Harnett County Resource Center and Library, 455 McKinney Parkway, Lillington, North Carolina. Members present: Matthew B. Nicol, Chairman William Morris, Vice Chairman Barbara McKoy, Commissioner W.Brooks Matthews, Commissioner Duncan “Eddie” Jaggers, Commissioner Staff present: Dwight Snow, County Attorney Kimberly Honeycutt, Finance Officer Brent Trout, County Manager Melissa Capps, Clerk Chairman Nicol called the Harnett County Board of Commissioners meeting to order at 9:00 am. Commissioner Jaggers led the Pledge of Allegiance and provided the invocation. The following agenda was before the Board of Commissioners: 1.Call to order – Chairman Matt Nicol 2.Pledge of Allegiance and Invocation – Commissioner Eddie Jaggers 3.Provide an update on the Animal Shelter and Adoption Center Project and discuss a request for approval of land purchase for the project; Barry Blevins, General Services Director and Coley Price, Deputy County Manager (please note action may be taken on this item) 4.Discuss a request for approval to accept 123 Investment in Performance Management Funding in the amount of $12,190 from NC Department of Health and Human Services (DHHS); Ainsley Johnson, Health Director 5.Discuss a request for Department of Social Services (DSS) to use the remaining amount of Displaced American Rescue Plan Act (ARPA) funding that was designated for the DSS upfit to purchase furniture; Paul Polinski, Social Services Director 6.Development Services briefing: •Proposed Text Amendment: Case # PLAN 2501-0002 Applicant: Harnett County Development Services; Harnett County Unified Development Ordinance; Article IV “Zoning & Overlay Districts” Section 2.0 “Zoning Map”. •Proposed Text Amendment: Case # PLAN 2502-0001 Applicant: Harnett County Development Services; Harnett County Unified Development Ordinance; Article III “Development & Subdivision Review, Permitting & Item 4Aii HCBOC 031725 Pg. 23 Harnett County Board of Commissioners Work Session Minutes March 11, 2025 Page 2 of 5 Approval Requirements” Section 8.2.3 “Subdivision & Plat Requirements” & 8.4.1 “Review for Minor Subdivision” 7. Discuss a request for permission to apply for a $20,000 NC Department of Military and Veterans Affairs (DMVA) Grant for County Veteran Offices; Eric Truesdale, Veteran Services Director 8. Discuss a request to approve the contract with Martin Starnes & Associates, CPAs, P.A. for the completion of the County's required audit for the fiscal year ending June 30, 2025; Kimberly Honeycutt, Finance Officer 9. Discuss a request to adopt a Resolution approving an installment financing contract and delivery thereof and providing for certain other related matters as it relates to the construction of a new middle school following the public hearing scheduled for March 17, 2025; Kimberly Honeycutt; Finance Officer 10. Discuss a request to approve the work authorization for Parrish and Partners to conduct Pre-NEPA studies for the Harnett Regional Jetport Runway 5-23 Improvement Project; Bradley Abate, Jetport Director and Brent Trout, County Manager 11. Discuss a request for approval of a Pepper Spray policy to provide guidance to eligible non-law enforcement employees of the County; Christopher Appel, Senior Staff Attorney 12. Discuss roadside litter in Harnett County; Commissioner Eddie Jaggers and Chad Beane, Solid Waste Director 13. Review applications to serve on Boards and Committees. 14. County Manager’s Report – Brent Trout, County Manager • March 17, 2025 Regular Meeting Agenda Review • Upcoming meetings and invitations 15. Closed Session 16. Adjourn Coley Price, Deputy County Manager and Barry Blevins, General Services Director, provided an overview of the proposed property for the Animal Shelter and Adoption Center Project. Information included: • 10-acre parcel – Site Suitable for Adoption Center • NCDOT Preliminarily Indicates NO Issue with Permits • Board of Adjustment - No Opposition from Adjacent Landowners – Special Use Permit approved • Phase 1 - No Identifiable Contaminants / No History of Environmental Hazards • Soil Analysis - Soils Suitable for Wastewater Disposal • Property Survey – Underway / Boundary Completed Commissioner Matthews made a motion to approve the request for the purchase of land for the Animal Shelter and Adoption Center Project. The motion was seconded by Vice Chairman Morris and carried unanimously. HCBOC 031725 Pg. 24 Harnett County Board of Commissioners Work Session Minutes March 11, 2025 Page 3 of 5 Ainsley Johnson, Health Director, reviewed a request for the approval to accept 123 Investment in Performance Management Funding in the amount of $12,190 from NC Department of Health and Human Services (DHHS). These were issued by North Carolina Division of Public Health to enhance and strengthen performance management, and quality improvement in local health departments. Consensus of the Board was to place this item on the next consent agenda. Paul Polinski, Social Services Director, reviewed a request for the approval to use the remaining amount of Displaced American Relief Plan Act (ARPA) funding that was designated for the DSS upfit to purchase furniture. We would like to purchase furniture for the remaining offices in our main building. This would complete the renovation of DSS. The cost of the desks and installation are $85,145. The amount of ARPA funding remaining for the upfit is $95,736. Consensus of the Board was to place this item on the next consent agenda. Sarah Arbour, Planner II, provided a briefing on the following upcoming public hearings: • Proposed Text Amendment: Case # PLAN 2501-0002 Applicant: Harnett County Development Services; Harnett County Unified Development Ordinance; Article IV “Zoning & Overlay Districts” Section 2.0 “Zoning Map”. • Proposed Text Amendment: Case # PLAN 2502-0001 Applicant: Harnett County Development Services; Harnett County Unified Development Ordinance; Article III “Development & Subdivision Review, Permitting & Approval Requirements” Section 8.2.3 “Subdivision & Plat Requirements” & 8.4.1 “Review for Minor Subdivision” Eric Truesdale, Veteran Services Director, reviewed a request for approval to apply for a $20,000.00 NC Department of Military and Veterans Affairs (DMVA) Grant for County Veterans Offices. Grant funds can be used for training and education, conferences, compensation for personnel service, office supplies and public relations. Consensus of the Board was to place this item on the next consent agenda. Kimberly Honeycutt, Finance Officer, reviewed a request for approval of the contract with Martin Starnes & Associates, CPAs, P.A. for the completion of the County's required audit for the fiscal year ending June 30, 2025. Consensus of the Board was to place this item on the next consent agenda. Ms. Honeycutt also reviewed a request for the Board to adopt a Resolution approving an installment financing contract and delivery thereof and providing for certain other related matters as it relates to the construction of a new middle school (Flatwoods Middle School) following the public hearing scheduled for March 17, 2025. Consensus of the Board was to place this as an individual action item following the public hearing on March 17, 2025. Bradley Abate, Harnett Regional Jetport Director, reviewed a request for the approval of a work authorization for the work to conduct the necessary Pre-NEPA studies. Harnett County received a $15.6 million grant to extend the existing runway by 500 feet. The first step of the project is to conduct Pre-NEPA studies for project approvals. Parrish and Partners, our engineer of record, has prepared a scope of work to conduct the necessary Pre-NEPA studies. The work HCBOC 031725 Pg. 25 Harnett County Board of Commissioners Work Session Minutes March 11, 2025 Page 4 of 5 authorization for the studies is presented to the board for review and approval. The cost of the study work is $107,024.00. The cost of the study will be paid with grant funding. Consensus of the Board was to place this item on the next consent agenda. Christopher Appel, Senior Staff Attorney, reviewed a request for the approval of a Pepper Spray policy. The purpose of the policy is to provide guidance to eligible non-law enforcement employees of the County regarding the possession and use of County-issued Pepper Spray in the course of their employment. Consensus of the Board was to place this item on the next consent agenda. Commissioner Jaggers stated riding through Harnett County you can see there’s a lot of things we need to do to stop or try to help correct the problem we have regarding roadside litter. Commissioner Jaggers stated the main roads leading to the landfill are some of the worst roads. Vice Chairman Morris shared concerns regarding tires that had been dumped on Byrds Pond Road. Chad Beane, Solid Waste Director shared some of the steps they have taken include: • Keep Harnett Beautiful (staff coordinator and volunteers) • Building strong communication and cooperation with NCDOT • Met with NCDOT officials last May to understand their responsibilities and plan of action • Increased patrolling and investigations into illegal dumping • Programs in place through Keep Harnett Beautiful such as Fall and Spring Litter Sweeps as well as Education and Outreach programs at schools, civic groups, churches, etc • Organize and assist volunteers with supplies needed for cleanups • Field any complaints from citizens of problematic areas to get those areas cleaned up • Adopt a highway program – NCDOT • SWAT a litterbug program – NCDOT Additional discussion included extending hours of operation for landfill, potentially adding an additional environmental officer, fines, asking NCDOT to add signage regarding fines for littering, additional convenience sites or more containers at convenience sites, the fee schedule and getting information out to encourage people not to litter. Mr. Beane shared the spring litter sweep will be held in April by Keep Harnett County Beautiful. The Board reviewed applications received for boards and committees. Consensus of the Board was to hold until the next work session to allow time for additional review. Brent Trout, County Manager, stated in our budget process we do have plans to add an expansion request that will allow us to extend the landfill hours so that the board can look at that; it will change staffing requirements, and we could look at the fee schedule and how changes might affect revenue. The Board of Elections is in process of conducting their move to the building on Alexander Drive. The electrical vehicle charging station at the Jetport is now open. Tonight, at HCBOC 031725 Pg. 26 Harnett County Board of Commissioners Work Session Minutes March 11, 2025 Page 5 of 5 the Angier Train Depot, Commissioners Matthews and Jaggers will be hosting at Town Hall meeting that starts at 6:00 pm. Budget meetings are ongoing this week. Commissioner Jaggers made a motion to go into Closed Session for the following purposes: 1. To discuss certain economic development matters; and 2. Consultation with and instructions to County staff concerning the position to be taken by the County in negotiating a proposed contract for the acquisition of real property. This motion is made pursuant to NC General Statute Section 143-318.11 (a)(4) and (5). The motion was seconded by Vice Chairman Morris and carried unanimously. Following a motion to come out of Closed Session, Chairman Nicol called the meeting back into open session. Commissioner Jaggers requested a discussion item regarding fluoride be added to next work session, April 1st. Vice Chairman Morris made a motion to adjourn the Board of Commissioners at 10:19 am. Commissioner Jaggers seconded the motion. Motion carried unanimously. ____________________________________ ___________________________________ Matthew B. Nicol, Chairman Melissa Capps, Clerk HCBOC 031725 Pg. 27 Item 4B HCBOC 031725 Pg. 28 \\lecfile\department\Admin\Clerk to the Board docs\AGENDAS\2025\031725 m\4C.1 DSS furniture agendaform2025.docx Page 1 of 1 Board Meeting Agenda Item MEETING DATE: March 17, 2025 TO: HARNETT COUNTY BOARD OF COMMISSIONERS SUBJECT: DSS furniture REQUESTED BY: Paul Polinski / DSS Director REQUEST: DSS would like to use the remaining amount of ARPA funding that was designated for the DSS upfit to purchase furniture. We would like to purchase furniture for the remaining offices in our main building. This would complete the renovation of DSS. The cost of the desk and installation are $85,145. The amount of ARPA funding remaining for the upfit is $95,736. The furniture would be purchased from Office Value in Dunn through state contract. FINANCE OFFICER’S RECOMMENDATION: COUNTY MANAGER’S RECOMMENDATION: Item 4C HCBOC 031725 Pg. 29 HCBOC 031725 Pg. 30 HCBOC 031725 Pg. 31 Item 4D HCBOC 031725 Pg. 32 HCBOC 031725 Pg. 33 HCBOC 031725 Pg. 34 HCBOC 031725 Pg. 35 HCBOC 031725 Pg. 36 HCBOC 031725 Pg. 37 \\lecfile\department\Admin\Clerk to the Board docs\AGENDAS\2025\031725 m\4E.1 03.17.2025 Annual Audit Contract Agenda Cover Page.docx Page 1 of 1 Board Meeting Agenda Item MEETING DATE: March 17, 2025 TO: HARNETT COUNTY BOARD OF COMMISSIONERS SUBJECT: Annual County Audit REQUESTED BY: Kimberly Honeycutt, Finance Officer REQUEST: Respectfully request that the Harnett County Board of Commissioners approve the attached contract with Martin Starnes & Associates, CPAs, P.A. for the completion of the County's required audit for the fiscal year ending June 30, 2025. FINANCE OFFICER’S RECOMMENDATION: Approve and execute attached audit contract. COUNTY MANAGER’S RECOMMENDATION: Item 4E HCBOC 031725 Pg. 38 CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. /2 The of and and for Primary Government Unit, together with DPCU (if applicable), hereinafter referred to as Governmental Unit(s) Auditor Name Auditor Address Hereinafter referred to as Auditor hereby agree as follows: Must be within VL[ months of FYE ÐÓ The Auditor shall audit all statements and disclosures required by U.S. generally accepted auditing standards (GAAS) and additional required legal statements and disclosures of all funds and/or divisions of the Governmental Unit(s). The non-major combining, and individual fund statements and schedules shall besubjected to the auditing procedures applied in the audit of the basic financial statements and an opinion shallbe rendered in relation to (as applicable) the governmental activities, the business- type activities, the aggregateDPCUs, each major governmental and enterprise fund, and the aggregate remaining fundinformation (non-major government and enterprise funds, the internal service fund type, and the fiduciary fundtypes).7KH EDVLFILQDQFLDOVWDWHPHQWVVKDOOLQFOXGHEXGJHWDU\FRPSDULVRQLQIRUPDWLRQLQDEXGJHWDU\FRPSDULVRQ VWDWHPHQWUDWKHUWKDQDV56,IRUWKH*HQHUDO)XQGDQGDQ\DQQXDOO\EXGJHWHG6SHFLDO5HYHQXHIXQGV ÏÓ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age 1 Governing Board Primary Government Unit Discretely Presented Component Unit (DPCU) (if applicable) Fiscal Year Ending 'DWH$XGLW:LOO%H6XEPLWWHGWR/*& Board of Commissioners Harnett County, NC N/A Martin Starnes & Associates, CPAs, P.A. 730 13th Avenue Drive SE, Hickory, NC 28602 06/30/25 12/31/25 HCBOC 031725 Pg. 39 CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. /20 If an entity is determined to be a component of another government as defined by the group audit standards, the entity’s auditor shall make a good faith effort to comply in a timely manner with the requests of the group auditor in accordance with AU-6 §600.41 - §600.42. This contract contemplates an unmodified opinion being rendered. If during the process of conducting the audit, the Auditor determines that it will not be possible to render an unmodified opinion on the financial statements of the unit, the Auditor shall contact the LGC 6taff to discuss the circumstances leading to that conclusion as soon as is practical and before the final report is issued. The audit shall include such tests of the accounting records and such other auditing procedures as are considered by the Auditor to be necessary inthe circumstances. Any limitations or restrictions in scope which would lead to a qualification should be fully explained in an attachment to this contract. If this audit engagement is subject to the standards for audit as defined in Government Auditing Standards, 201 revision, issued by the Comptroller General of the United States, then by accepting this engagement, the Auditor warrants that he/she has met the requirements for a peer review and continuing education as specified in Government Auditing Standards. The Auditor agrees to provide a copy of the most recent peer review report to the Governmental Unit(s) and the Secretary of the LGC prior to the execution of an audit contract. Subsequent submissions of the report are required only upon report expiration or upon auditor’s receipt of an updated peer review report. If the audit firm received a peer review rating other than pass, the Auditor shall not contract with the Governmental Unit(s) without first contacting the Secretary of the LGC for a peer review analysis that may result in additional contractual requirements. If the audit engagement is not subject to Government AXGLWLQJ Standards or if financial statements are not prepared in accordance with U.S. generally accepted accounting principles (GAAP) and fail to include all disclosures required by GAAP, the Auditor shall provide an explanation as to why in an attachment to this contract or in an amendment. It is agreed that time is of the essence in this contract. All audits are to be performed and the report of audit submitted to LGC 6Waff within VL[ months of fiscal year end. If it becomes necessary to amend thHDXGLW IHHRUWKHGDWHWKDWWKHDXGLWUHSRUWZLOOEHVXEPLWWHGWRWKH/*&, an amended contract along with a written explanation of the FKDQJH shall be submitted tothe Secretary of the LGC for approval. ,WLVDJUHHGWKDW*$$6LQFOXGHDUHYLHZRIWKH*RYHUQPHQWDO8QLW¶V8QLWV¶V\VWHPVRILQWHUQDOFRQWURO DQGDFFRXQWLQJDVVDPHUHODWHWRDFFRXQWDELOLW\RIIXQGVDQGDGKHUHQFHWREXGJHWDQGODZUHTXLUHPHQWV DSSOLFDEOHWKHUHWRWKDWWKH$XGLWRUVKDOOPDNHDZULWWHQUHSRUWZKLFKPD\RUPD\QRWEHDSDUWRIWKHZULWWHQ UHSRUWRIDXGLWWRWKH*RYHUQLQJ%RDUGVHWWLQJIRUWKKLVKHUILQGLQJVWRJHWKHUZLWKKLVUHFRPPHQGDWLRQVIRU LPSURYHPHQW7KDWZULWWHQUHSRUWVKDOOLQFOXGHDOOPDWWHUVGHILQHGDV³VLJQLILFDQWGHILFLHQFLHVDQGPDWHULDO ZHDNQHVVHV´LQ$8&RIWKH$,&3$3URIHVVLRQDO6WDQGDUGV&ODULILHG7KH$XGLWRUVKDOOILOHDFRS\RIWKDW UHSRUWZLWKWKH6HFUHWDU\RIWKH/*& )RU*$$6RU*RYHUQPHQW$XGLWLQJ6WDQGDUGVDXGLWVLIDQDXGLWRULVVXHVDQ$8&UHSRUWFRPPRQO\ UHIHUUHGWRDV³*RYHUQDQFH/HWWHU´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age HCBOC 031725 Pg. 40 CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev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tRUDQGRYHUVLJKW agencies or other organizations) as required under the Federal and State Single Audit Acts. This does not include fees for any pre-issuance reviews that may be required by the NC Association of CPAs (NCACPA) Peer Review Committee or NCState Board of CPA Examiners (see Item 13). If the Governmental Unit(s) has/have outstanding revenue bonds, the Auditor shall submit to LGC 6taff, either in the notes to the audited financial statements or as a separate report, a calculation demonstrating compliance with the revenue bond rate covenant. Additionally, the Auditor shall submit to LGC 6taff simultaneously with the Governmental Unit’s (Units’) audited financial statements any other bond compliance statements or additional reports required by the authorizing bond documents, unless otherwise specified in the bond documents. After completing the audit, the Auditor shall submit to the Governing Board a written report of audit.This report shall include, but not be limited to, the following information: (a) Management’s Discussion andAnalysis, (b) the financial statements and notes of the Governmental Unit(s) and all of its component unitsprepared in accordance with GAAP, (c) supplementary information requested by the Governmental Unit(s) orrequired for full disclosure under the law, and (d) the Auditor’s opinion on the material presented. The Auditorshall furnish the required number of copies of the report of audit to the Governing Board upon completion. If the audit firm is required by the NC State Board, the NCACPA Peer Review Committee, or the Secretary of the LGC to have a pre-issuance review of its audit work, there shall be a statement in the engagement letter indicating the pre-issuance review requirement. There also shall be a statement that the Governmental Unit(s) shall not be billed for the pre-issuance review. The pre-issuance review shall beperformed prior to the completed audit being submitted to LGC Staff. The pre-issuance review report shallaccompany the audit report upon submission to LGC Staff 3DJHHCBOC 031725 Pg. 41 CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. /20 requesting the return of records. Page 4 7KH$XGLWRUVKDOOVXEPLWWKHUHSRUWRIDXGLWLQ3')IRUPDWWR/*&6WDII)RUDXGLWVRIXQLWVRWKHUWKDQ KRVSLWDOVWKHDXGLWUHSRUWVKRXOGEHVXEPLWWHGZKHQRUSULRUWRVXEPLWWLQJWKHILQDOLQYRLFHIRUVHUYLFHV UHQGHUHG7KHUHSRUWRIDXGLWDVILOHGZLWKWKH6HFUHWDU\RIWKH/*&EHFRPHVDPDWWHURISXEOLFUHFRUGIRU LQVSHFWLRQUHYLHZDQGFRS\LQWKHRIILFHVRIWKH/*&E\DQ\LQWHUHVWHGSDUWLHV$Q\VXEVHTXHQWUHYLVLRQVWR WKHVHUHSRUWVVKDOOEHVHQWWRWKH6HFUHWDU\RIWKH/*&7KHVHDXGLWHGILQDQFLDOVWDWHPHQWVH[FOXGLQJWKH $XGLWRUV¶RSLQLRQPD\EHXVHGLQWKHSUHSDUDWLRQRIRIILFLDOVWDWHPHQWVIRUGHEWRIIHULQJVE\PXQLFLSDOERQG UDWLQJVHUYLFHVWRIXOILOOVHFRQGDU\PDUNHWGLVFORVXUHUHTXLUHPHQWVRIWKH6HFXULWLHVDQG([FKDQJH&RPPLVVLRQ DQGIRURWKHUODZIXOSXUSRVHVRIWKH*RYHUQPHQWDO8QLWVZLWKRXWUHTXLULQJFRQVHQWRIWKH$XGLWRU,IWKH/*& 6WDIIGHWHUPLQHVWKDWFRUUHFWLRQVQHHGWREHPDGHWRWKH*RYHUQPHQWDO8QLW¶V8QLWV¶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f an approved contract needs to be modified or amended for any reason, the change shall be made in writingDQGpre-audited if the change includes a change in audit fee(pre-audit requirement does not apply to Kospitals). This amended contract shall becompleted in full, including a written explanation ofthe change, signed and dated by all original parties to thecontract. It shall then be submitted to the Secretary ofthe LGC for approval. No change to the audit contractshall be effective unless approved by the Secretary of theLGC. A copy of the engagement letter, issued by the Auditor and signed by both the Auditor and the Governmental Unit(s), shall be attached to this contract, and except for fees, work, and terms not related to audit services, shall be incorporated by reference as if fully set forth herein as part of this contract. In case of conflict between the terms of the engagement letter and the terms of this contract, the terms of this contract shall take precedence. Engagement letter terms that conflict with the contract are deemed to be void unless the conflicting terms of this contract are specifically deleted in Item of this contract. Engagement letters containing indemnification clauses shall not be accepted by LGC Staff. Special provisions should be limited. Please list any special provisions in an attachment. A separate contract should not be made for each division to be audited or report to be submitted. If a DPCU is subject to the audit requirements detailed in the Local Government Budget and Fiscal Control Act and a separate audit report is issued, a separate audit contract is required. If a separate report is not to be issued and the DPCU is included in the primary government audit, the DPCU shall be named along with the pULPDU\ government on this audit contract. DPCU Board approval date, signatures from the DPCU Board chairman and finance officer also shall be included on this contract. The contract shall be executed, pre-audited (pre-audit requirement does not apply to hospitals), and physically signed by all parties including Governmental Unit(s) and the Auditor, thensubmitted inPDF format to the Secretary of the LGC. The contract is not valid until it is approved by the Secretary of the LGC. The staff of the LGC shall notify the Governmental Unit and Auditor of contract approval by email. The audit should not be started before the contract is approved. Retention of Client Records: Auditors are subject to the NC State Board of CPA Examiners’ Retention of Client Records Rule 21 NCAC 08N .0305 as it relates to the provision of audit and other attest services, as well as non-attest services. Clients and former clients should be familiar with the requirements of this rule prior to HCBOC 031725 Pg. 42 CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. /20 All non-attest service(s) being performed by the Auditor that are necessary to perform the audit must be identified and included in this contract. The Governmental Unit shall designate an individual with the suitable skills, knowledge, and/or experience (SKE) necessary to oversee the services and accept responsibility for the results of the services performed. If the Auditor is able to identify an individual with the appropriate SKE, s/he must document and include in the audit workpapers how he/she reached that conclusion. If the Auditor determines that an individual with the appropriate SKE cannot be identified, the Auditor cannot perform both the non-attest service(s) and the audit. See "Fees for Audit Services" page of this contract to disclose the person identified as having the appropriate SKE for the Governmental Unit. Page 5 $SSOLFDEOHWRDXGLWVZLWKILVFDO\HDUHQGVRI-XQHDQGODWHU7KHDXGLWRUVKDOOSUHVHQW WKHDXGLWHGILQDQFLDOVWDWHPHQWVLQFOXGLQJDQ\FRPSOLDQFHUHSRUWVWRWKHJRYHUQPHQWXQLW¶VJRYHUQLQJERG\RU DXGLWFRPPLWWHHLQDQRIILFLDOPHHWLQJLQRSHQVHVVLRQDVVRRQDVWKHDXGLWHGILQDQFLDOVWDWHPHQWVDUH DYDLODEOHEXWQRWODWHUWKDQGD\VDIWHUWKHVXEPLVVLRQRIWKHDXGLWUHSRUWWRWKH6HFUHWDU\7KHDXGLWRU¶V SUHVHQWDWLRQWRWKHJRYHUQPHQWXQLW¶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³5HVSRQVHWRWKH $XGLWRU¶V)LQGLQJV5HFRPPHQGDWLRQVDQG)LVFDO0DWWHUV´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¶V8QLWV¶IDLOXUHRUIRUEHDUDQFHWRHQIRUFHRUZDLYHURIDQ\ULJKWRUDQHYHQW RIEUHDFKRUGHIDXOWRQRQHRFFDVLRQRULQVWDQFHVKDOOQRWFRQVWLWXWHWKHZDLYHURIVXFKULJKWEUHDFKRU GHIDXOWRQDQ\VXEVHTXHQWRFFDVLRQRULQVWDQFH 7KHUHDUHQRRWKHUDJUHHPHQWVEHWZHHQWKHSDUWLHVKHUHWRDQGQRRWKHUDJUHHPHQWVUHODWLYHKHUHWR WKDWVKDOOEHHQIRUFHDEOHXQOHVVHQWHUHGLQWRLQDFFRUGDQFHZLWKWKHSURFHGXUHVHWRXWKHUHLQDQGDSSURYHG E\WKH6HFUHWDU\RIWKH/*& E-Verify. Auditor shall comply with the requirements of NCGS Chapter 64 Article 2. Further, if Auditor utilizes any subcontractor(s), Auditor shall require such subcontractor(s) to comply with the requirements of NCGS Chapter 64, Article 2. $SSOLFDEOHWRDXGLWVZLWKILVFDO\HDUHQGVRI-XQHDQGODWHU)or all non-attest services, the Auditor shall adhere to the independence rules of the AICPAProfessional Code of Conduct and *RYHUQPHQW$XGLWLQJ6WDQGDUGV5HYLVLRQ (as applicable).3UHSDULQJIinancial statementVLQWKHLU HQWLUHW\shall be deemed a “significant threat” requiring the Auditor toapply safeguards sufficient toreduce the threatto an acceptable level. If the Auditor cannot reduce thethreats to an acceptable level, theAuditor cannotcomplete the audit. If the Auditor is able to reduce thethreats to an acceptable level, the documentation ofthis determination, including the safeguards applied,must be included in the audit workpapers. HCBOC 031725 Pg. 43 CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. /20 $OORIWKHDERYHSDUDJUDSKVDUHXQGHUVWRRGDQGVKDOODSSO\WRWKLVFRQWUDFWH[FHSWWKH IROORZLQJQXPEHUHGSDUDJUDSKVVKDOOEHGHOHWHG6HH,WHPIRUFODULILFDWLRQ The process for submitting contracts, audit reports and invoices is subject to change. Auditors andunits should use the submission process and instructions in effect at the time of submission. Referto theN.C. Department of State Treasurer website at KWWSVZZZQFWUHDVXUHUFRPVWDWHDQGORFDO JRYHUQPHQWILQDQFHGLYLVLRQORFDOJRYHUQPHQWFRPPLVVLRQVXEPLWWLQJ\RXUDXGLW $OOFRPPXQLFDWLRQVUHJDUGLQJDXGLWFRQWUDFWUHTXHVWVIRUPRGLILFDWLRQRURIILFLDODSSURYDOVZLOOEH VHQWWRWKHHPDLODGGUHVVHVSURYLGHGRQWKHVLJQDWXUHSDJHVWKDWIROORZ 0RGLILFDWLRQVWRWKHODQJXDJHDQGWHUPVFRQWDLQHGLQWKLVFRQWUDFWIRUP/*&DUHQRW DOORZHG Page HCBOC 031725 Pg. 44 CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. /20 FEES FOR AUDIT SERVICES 1. For all non-attest services, the Auditor shall adhere to the independence rules of the AICPA Professional Code of Conduct (as applicable) and Government Auditing Standards,2018 Revision. Refer to Item 2 of this contract for specific requirements. The following information must be provided by the Auditor; contracts presented to the LGC without Whis information will be not be approved. Financial statements were prepared by: Auditor Governmental Unit Third Party If applicable: Individual at Governmental Unit designated to have the suitable skills, knowledge, and/or experience (SKE) necessary to oversee the non-attest services and accept responsibility for the results of these services: Name: TitleDQG8QLW&RPSDQ\: Email Address: Fees may not be included in this contract for work performed on Annual Financial Information Reports (AFIRs), Form 990s, or other services not associated with audit fees and costs. Such fees may be includedinthe engagement letter but may not be included in this contract or in any invoices requiring approval of theLGC.See Items 8DQG for details on other allowable and excluded fees. 7KHDXGLWIHHLQIRUPDWLRQLQFOXGHGLQWKHWDEOHEHORZIRUERWKWKH3ULPDU\*RYHUQPHQW)HHVDQGWKH'3&8 )HHVLIDSSOLFDEOHVKRXOGEHUHSRUWHGDVDVSHFLILFGROODUDPRXQWRIDXGLWIHHVIRUWKH\HDUXQGHUWKLVFRQWUDFW,I DQ\ODQJXDJHRWKHUWKDQDQDPRXQWLVLQFOXGHGKHUHWKHFRQWUDFWZLOOEHUHWXUQHGWRWKHDXGLWIRUPIRUFRUUHFWLRQ Prior to WKHsubmission of the completed audited financial reportDQG applicable compliance reportsVXEMHFWWR WKLVFRQWUDFW RUWRDQ DPHQGPHQWWRWKLVFRQWUDFW(if required) the Auditor may submit LQWHULPinvoices for approval for services renderedXQGHUWKLVFRQWUDFWWRWKH6HFUHWDU\RIWKH/*&, not to exceed 75%of the billings IRUWKHXQLW VODVWDQQXDODXGLWWKDWZDVVXEPLWWHGWRWKH6HFUHWDU\RIWKH/*& All invoices for services rendered in an auditengagement asdefined in20NCAC.0503shall besubmitted to the Commission for approval before anypayment is made.Paymentbeforeapproval is aviolationof law. (This SDUDJUDSK not applicable to contracts DQGLQYRLFHVDVVRFLDWHGZLWKDXGLWVRIKRVSLWDOV 3ULPDU\*RYHUQPHQW8QLW Audit FeeILQDQFLDODQGFRPSOLDQFHLIDSSOLFDEOH $ Fee per Major Program LIQRWLQFOXGHGDERYH$ )inancial Statement3UHSDUDWLRQLQFOQRWHVDQG56,$ All Other Non-Attest Services $ 'LVFUHWHO\3UHVHQWHG&RPSRQHQW8QLW Audit FeeILQDQFLDODQGFRPSOLDQFHLIDSSOLFDEOH $ $GGLWLRQDO)HHV1RW,QFOXGHG$ERYHLIDSSOLFDEOH Fee per Major Program LIQRWLQFOXGHGDERYH$ Financial Statement3UHSDUDWLRQLQFOQRWHVDQG56, $ All Other Non-Attest Services $ Page 251RW$SSOLFDEOH ,GHQWLILFDWLRQRI6.(,QGLYLGXDORQWKH/*&&RQWUDFWLVQRWDSSOLFDEOHIRU *$$6RQO\DXGLWVRUDXGLWVZLWK)<(VSULRUWR-XQH 727$/$0281712772(;&((' $ $GGLWLRQDO)HHV1RW,QFOXGHG$ERYHLIDSSOLFDEOH 727$/$0281712772(;&((' $ ✔ Kimberly A. Honeycutt Finance Officer, Harnett County khoneycutt@harnett.org Harnett County, NC 108,750 (includes single audit for up to 2 programs) 4,250 per major program in excess of 2 13,850 139,600 (includes 6 major programs) N/A HCBOC 031725 Pg. 45 LGC-205 CONTRACT TO AUDIT ACCOUNTS Rev. Page SIGNATURE PAGE AUDIT FIRM Audit Firm Authorized Firm Representative (typed or printed) Signature Date Email Address GOVERNMENTAL UNIT Governmental Unit Date Governing Board Approved Audit Contract (QWHUGDWHLQER[WRULJKW Mayor/Chairperson (typed or printed) Signature Date Email Address Chair of Audit Committee (typed or printed, or “NA”) Signature Date Email Address GOVERNMENTAL UNIT – PRE-AUDIT CERTIFICAT( Required by G.S. 159-28(a1) or G.S. 115C-441(a1)1RWDSSOLFDEOHWRKRVSLWDOFRQWUDFWV This instrument has been pre-audited in the manner required by The Local Government Budget and Fiscal Control Act or by the School Budget and Fiscal Control Act. Primary Governmental Unit Finance Officer (typed or printed)Signature Date of Pre-Audit Certificate Email Address 6XP2EOLJDWHGE\7KLV7UDQVDFWLRQ ess Martin Starnes & Associates, CPAs, P.A. Amber Y. McGhinnis 02/20/25 amcghinnis@msa.cpa Harnett County, NC Matt Nicol, Chairman mnicol@harnett.org N/A 139,600 (includes 6 major programs) Kimberly A. Honeycutt, CLGFO, Finance Officer khoneycutt@harnett.org HCBOC 031725 Pg. 46 LGC-205 CONTRACT TO AUDIT ACCOUNTS Rev./20 Page SIGNATURE PAGE – DPCU (complete only if applicable) DISCRETELY PRESENTED COMPONENT UNIT DPCU Date DPCU Governing Board Approved Audit Contract (QWHUGDWHLQER[WRULJKW '3&8Chairperson (typed or printed) Signature Date Email Address Chair of Audit Committee (typed or printed, or “NA”) Signature Date Email Address DPCU – PRE-AUDIT CERTIFICATE Required by G.S. 159-28(a1) or G.S. 115C-441(a11RWDSSOLFDEOHWRKRVSLWDOFRQWUDFWV This instrument has been pre-audited in the manner required by The Local Government Budget and Fiscal Control Act or by the School Budget and Fiscal Control Act. '3&8 Finance Officer (typed or printed) Signature Date of Pre-Audit Certificate Email Address 5HPHPEHUWRSULQWWKLVIRUPDQGREWDLQDOO UHTXLUHGVLJQDWXUHVSULRUWRVXEPLVVLRQ SXP2EOLJDWHGE\WKLV7UDQVDFWLRQ N/A N/A N/A N/A PRINT HCBOC 031725 Pg. 47 deandorton.com Report on the Firm’s System of Quality Control To the Shareholders of Martin Starnes & Associates, CPAs, P.A. and the Peer Review Committee, Coastal Peer Review, Inc. We have reviewed the system of quality control for the accounting and auditing practice of Martin Starnes & Associates, CPAs, P.A. (the firm) in effect for the year ended December 31, 2023. Our peer review was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants (Standards). A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as described in the Standards may be found at www.aicpa.org/prsummary. The summary also includes an explanation of how engagements identified as not performed or reported in conformity with applicable professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating. Firm’s Responsibility The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. The firm is also responsible for evaluating actions to promptly remediate engagements deemed as not performed or reported in conformity with professional standards, when appropriate, and for remediating weaknesses in its system of quality control, if any. Peer Reviewer’s Responsibility Our responsibility is to express an opinion on the design of the system of quality control and the firm’s compliance therewith based on our review. Required Selections and Considerations Engagements selected for review included engagements performed under Government Auditing Standards, including compliance audits under the Single Audit Act and an audit of an employee benefit plan. As part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if applicable, in determining the nature and extent of our procedures. Opinion In our opinion, the system of quality control for the accounting and auditing practice of Martin Starnes & Associates, CPAs, P.A. in effect for the year ended December 31, 2023, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies)or fail. Martin Starnes & Associates, CPAs, P.A. has received a peer review rating of pass. Dean Dorton Allen Ford, PLLC May 10, 2024 HCBOC 031725 Pg. 48 \\lecfile\department\Admin\Clerk to the Board docs\AGENDAS\2025\031725 m\4F.1 Agenda Memo_Pepper Spray.docx Page 1 of 1 Board Meeting Agenda Item MEETING DATE: March 17, 2025 TO: HARNETT COUNTY BOARD OF COMMISSIONERS SUBJECT: Pepper Spray Policy REQUESTED BY: Christopher Appel, Senior Staff Attorney REQUEST: The Legal Department requests the approval of a Pepper Spray policy. The purpose of the policy is to provide guidance to eligible non-law enforcement employees of the County regarding the possession and use of County-issued Pepper Spray in the course of their employment. FINANCE OFFICER’S RECOMMENDATION: COUNTY MANAGER’S RECOMMENDATION: Item 4F HCBOC 031725 Pg. 49 PEPPER SPRAY (OLEORESIN CAPSICUM) POLICY Adopted March 17, 2025 HCBOC 031725 Pg. 50 ADMINISTRATIVE POLICY SUBJECT: PEPPER SPRAY (OLEORESIN CAPSICUM) POLICY NUMBER REVISIONS BOARD OF COMMISSIONERS APPROVAL DATE SUPERSEDES EFFECTIVE DATE MARCH 17 , 2025 PAGE PAGE 2 OF 5 2 Table of Contents Purpose ........................................................................................................................................... 3 Applicability ..................................................................................................................................... 3 Definitions ....................................................................................................................................... 3 Required Training ............................................................................................................................ 3 Use Criteria ...................................................................................................................................... 4 Reporting Requirements .................................................................................................................. 5 Storage, Maintenance, and Replacement ........................................................................................ 5 HCBOC 031725 Pg. 51 ADMINISTRATIVE POLICY SUBJECT: PEPPER SPRAY (OLEORESIN CAPSICUM) POLICY NUMBER REVISIONS BOARD OF COMMISSIONERS APPROVAL DATE SUPERSEDES EFFECTIVE DATE MARCH 17 , 2025 PAGE PAGE 3 OF 5 3 Purpose The purpose of the Pepper Spray (Oleoresin Capsicum) Policy (hereinafter referred to as the “Policy”) is to provide guidance to eligible non-law enforcement employees of the County of Harnett (hereinafter referred to as the “County”) regarding the possession and use of County-issued Oleoresin Capsicum (hereinafter referred to as “Pepper Spray”) in the course of their employment. Applicability This Policy shall apply to eligible non-law enforcement County employees (except animal control officers) who voluntarily choose to carry County-issued Pepper Spray during the performance of their job duties. Definitions 1. Imminent Danger or Threat – An unlawful immediate threat of harm that an employee could reasonably believe will cause physical harm to themselves or to others. 2. Oleoresin Capsicum Spray (also known as “O.C. Spray” or “Pepper Spray”) – Aerosol spray based on the active natural ingredient oleoresin capsicum, a derivative of various species of cayenne pepper. 3. Use of Force – The use of non-deadly force against another, including the use of Pepper Spray, when and to the extent that the employee reasonably believes that the conduct is necessary to defend themselves or another against an Imminent Danger or Threat or to stop further physical injury to themselves or others. Required Training All employees who voluntarily choose and receive approval to carry Pepper Spray at work shall participate in a mandatory safety training course provided by the Harnett County Sheriff’s Office or approved County vendor prior to carrying Pepper Spray during the performance of their job duties. Refresher training on the use of Pepper Spray shall be completed every two (2) years. Any employee that misuses Pepper Spray and/or uses Pepper Spray more than once in a 12-month period shall be required to attend the next available training session upon the subsequent use incident unless the employee’s approval has been revoked. Mandatory training shall be provided by a qualified instructor and include the following elements: HCBOC 031725 Pg. 52 ADMINISTRATIVE POLICY SUBJECT: PEPPER SPRAY (OLEORESIN CAPSICUM) POLICY NUMBER REVISIONS BOARD OF COMMISSIONERS APPROVAL DATE SUPERSEDES EFFECTIVE DATE MARCH 17 , 2025 PAGE PAGE 4 OF 5 4 1. Things to consider before using pepper spray, such as the subject’s age, mental state, observable health, pregnancy, environment, proximity to others, etc. 2. Personal safety training that emphasizes risk avoidance, including nonviolent means of defusing confrontational situations. 3. Other means of self-defense such as de-escalation techniques. 4. Instruction that Pepper Spray works only under certain circumstances. 5. How to correctly and safely administer the Pepper Spray. 6. How and where the Pepper Spray must be stored and secured during non- employment hours. 7. Steps to take once the Pepper Spray has been administered. 8. Warning to employees about the possible adverse consequences of the improper use of Pepper Spray; disciplinary action, criminal charges, and civil tort liability for damages. Use Criteria Authorized Use of Pepper Spray The use of Pepper Spray is restricted to the following: 1. To protect oneself or others from an Imminent Danger or Threat and all other non-Use of Force measures have been exhausted or would be ineffective to prevent an Imminent Danger or Threat. 2. To stop further physical injury to oneself or others and all other non-Use of Force measures have been exhausted or would be ineffective to prevent an Imminent Danger or Threat. 3. At the direct order of a law enforcement officer. 4. While coming to the aid or assistance of a law enforcement officer who is not able to give a direct order. 5. Use by an Animal Control Officer in accordance with Animal Services policies and procedures. At no time should an employee attempt to physically restrain a person or animal who has been pepper sprayed unless left with no other choice to prevent physical injury or death to oneself or others. Employees, when practical and safe to do so, shall withdraw from the situation or property, call 911, and wait for law enforcement or animal services assistance. Unauthorized Use of Pepper Spray HCBOC 031725 Pg. 53 ADMINISTRATIVE POLICY SUBJECT: PEPPER SPRAY (OLEORESIN CAPSICUM) POLICY NUMBER REVISIONS BOARD OF COMMISSIONERS APPROVAL DATE SUPERSEDES EFFECTIVE DATE MARCH 17 , 2025 PAGE PAGE 5 OF 5 5 The use of Pepper Spray other than permitted by this Policy may result in revocation of their right to carry Pepper Spray and/or may subject the employee to disciplinary action, up to and including termination. Additionally, unauthorized use of Pepper Spray may subject the employee to civil and/or criminal penalties. Reporting Requirements Use of Pepper Spray in the course of an employee’s job duties on a person shall be reported to law enforcement or Animal Services as soon as it is safe to do so. Once the scene is secure, the employee shall contact their Department Head or immediate supervisor to report the incident. The employee shall also complete the “Pepper Spray incident Report” and return it to their Department Head or immediate supervisor within twenty-four (24) hours from the use of Pepper Spray. The Department Head or Supervisor shall forward all incident reports to the Human Resources & Risk Management department. Storage, Maintenance, and Replacement Employees must comply with the following requirements: 1. County-issued Pepper Spray shall be stored in a secure location as designated by the Department Head and left at work when not on duty. 2. Employees are responsible for following the manufacturer’s instructions for care and storage while in their possession. 3. Employees shall request a replacement device if it is damaged, inoperable, or empty. 4. Authorized employees and approved vendors shall maintain County-issued Pepper Spray devices that are within the expiration date listed on the device. Pepper Spray devices that are expired shall be exchanged for a device that complies with the expiration requirements. HCBOC 031725 Pg. 54 1 PEPPER SPRAY INCIDENT REPORT This form must be completed and signed by the employee who is involved in the use of Pepper Spray and turned into their Department Head or supervisor within twenty-four (24) hours. Please print legibly, provide all the information requested below, attach any documents and statements related to the incident, and sign upon completion. Employee Name: ________________________________ Department: ____________________________________ Job Title: ______________________________________ Name of Supervisor: _____________________________ INCIDENT INFORMATION 1. Date of Incident: ________________________________ 2. Time of Incident: ________________________________ 3. Location of Incident (Specific Location/Address) ____________________________________________________________________ ____________________________________________________________________ HCBOC 031725 Pg. 55 2 4. Please provide a detailed account of the events leading up to the use of pepper spray: (if more space is necessary, attach additional sheets) 5. Reason for the use of pepper spray: (Explain why pepper spray was deployed, including any threats or safety concerns) 6. Actions taken before and after deployment: (Describe any de-escalation attempts, warnings given, and actions taken following the incident, such as medical assistance or cleanup) 7. Was anyone injured? ☐ Yes ☐ No (If yes, provide details and attach medical documentation if applicable) 8. Was law enforcement or emergency services contacted? ☐ Yes ☐ No (If yes, provide details, including agency name and report number if available) HCBOC 031725 Pg. 56 3 9. List any individuals who witnessed the incident Name Contact [Phone/Email] The information provided in this incident report is true and correct to the best of my knowledge. _________________________ ________________________ ________________ Signature Print Name Date Department Head/Supervisor: __________________________ ________________________ ________________ Signature Print Name Date Attachments: (Check if included) ☐ Medical Report ☐ Security Footage ☐ Photos ☐ Witness Statements ☐ Other: [Specify] This form shall be submitted to the HR Department upon completion. HCBOC 031725 Pg. 57 \\lecfile\department\Admin\Clerk to the Board docs\AGENDAS\2025\031725 m\4G.1 Runway Extension Work Authorization for Pre NEPA Studies Agenda Form.docx Page 1 of 1 Board Meeting Agenda Item MEETING DATE: March 17, 2025 TO: HARNETT COUNTY BOARD OF COMMISSIONERS SUBJECT: Harnett Regional Jetport Runway 5-23 Improvement Project REQUESTED BY: Brent Trout, County Manager REQUEST: Harnett County received a $15.6 million grant to extend the existing runway by 500 feet. The first step of the project is to conduct Pre-NEPA studies for project approvals. Parrish and Partners, our engineer of record, has prepared a scope of work to conduct the necessary Pre-NEPA studies. The work authorization for the studies is presented to the board for review and approval. The cost of the study work is $107,024.00. The cost of the study will be paid with grant funding. FINANCE OFFICER’S RECOMMENDATION: COUNTY MANAGER’S RECOMMENDATION: Item 4G HCBOC 031725 Pg. 58 Parrish and Partners Scope of Work Runway 5-23 Improvement Program - Pre-NEPA (Grant No. TBD) HRJ - Work Authorization No. 6 Page 1 of 7 February 2025 Harnett Regional Jetport (HRJ) Work Authorization for Professional Services Parrish & Partners of North Carolina, PLLC TBD 6 (Project Number) (Work Authorization No.) Runway 5-23 Improvement Program – Pre-NEPA Planning Studies (Project Title) It is agreed to undertake the following work in accordance with the provisions of the Master Agreement for Professional Services dated January 5, 2022. I. PROJECT DESCRIPTION This project consists of planning services for the proposed Runway 5-23 Improvement Program at the Harnett Regional Jetport. Based on the current ALP, the program could include MALSR installation, relocation of an airport access road, widening of Runway 5- 23 from 75 feet to 100 feet, ROFA clearing, RSA grading, and a runway extension of 500 feet. This planning work will be completed in accordance with the NCDOT Division of Aviation’s “Guidelines for Advancing an Environmental Assessment (EA)” (NCDOA Guidelines, March 7, 2024). With the goal of providing NCDOA with the required items for documenting the decision to advance an EA, the following tasks will be performed: Task 1: Planning Studies Per the NCDOA Guidelines, this may include but is not limited to a Project Justification Study, Runway Protection Zone (RPZ) Alternatives Evaluation, Airport Layout Plan (ALP)/Airport Master Plan Update (AMPU), and Benefit-Cost Analysis. i. Project Justification Study – This comprehensive analysis provides the basis for determining the necessity and merits of the proposed Runway 5-23 Improvement Program. Key components will include the Project Description, Purpose and Need, Runway Length Justification, Alternatives Analysis, Feasibility Assessment, and Community Assessment. ii. RPZ Alternatives Evaluation and ALP/AMPU - The recently approved AMPU includes an RPZ Alternatives Evaluation. This existing information will be utilized as planning documentation for the subject project. iii. Cost-Benefit Analysis – Projected costs will be compared with the anticipated benefits, such as improved safety and operational efficiency, and economic impact. HCBOC 031725 Pg. 59 Parrish and Partners Scope of Work Runway 5-23 Improvement Program - Pre-NEPA (Grant No. TBD) HRJ - Work Authorization No. 6 Page 2 of 7 February 2025 Task 2: NEPA Scoping Memo Preparation The planning studies completed in Task 1 will be the basis of the NEPA Study Scoping Memo Template, which will include the project description, project justification/purpose and need, alternatives, anticipated impacts, permitting requirements and mitigation, identification of community and agency involvement, and detailed schedule. The Memo will be reviewed and approved by NCDOA prior to approving the scope of work for advancing the NEPA study. Once the NEPA study advances, this Memo will be used in project scoping activities with coordinating agencies. II. SCOPE OF SERVICES The CONSULTANT shall perform the following services for the project as outlined in Exhibit A, B and C of the above-referenced Master Agreement, as applicable. The CONSULTANT shall provide professional services in accordance with the following tasks described below (not in chronological order of execution): A. SPECIAL SERVICES 1. General Services i. Project Formulation: detailed descriptions of each item of work required for the establishment of the Runway 5-23 Improvement Program Pre-NEPA Planning Studies shall be prepared. Guidelines provided by the FAA and the North Carolina Department of Transportation, Division of Aviation (NCDOA) shall be integrated into the work plan and products. A detailed task-by-task itemization of the project budget and combined schedule shall be provided to the OWNER and NCDOA. Copies of the work program (scope, budget and schedule of major milestones) shall be prepared for the OWNER and NCDOA. ii. Project Management: Once approved by the OWNER and NCDOA, CONSULTANT shall assist the OWNER in preparation of requests for funding and completion of applicable grant forms, including but not limited to grant applications, interim requests for reimbursements, and other project related tasks not specifically covered in other elements, as well as subsequently providing grant administration services for the duration of the project. The product of this task shall be a scope of services and budget which shall be attached and made a part of the project contract documents. CONSULTANT shall assist the OWNER in identifying agencies and individuals that need to be contacted and informed of the project and shall provide background and technical information, as required. HCBOC 031725 Pg. 60 Parrish and Partners Scope of Work Runway 5-23 Improvement Program - Pre-NEPA (Grant No. TBD) HRJ - Work Authorization No. 6 Page 3 of 7 February 2025 CONSULTANT shall designate a Project Manager to coordinate and manage day-to-day activities of the project and to ensure that the project is completed in a professional manner to the satisfaction of the OWNER and NCDOA. The Project Manager shall coordinate directly with the designated OWNER representative on scope execution, work product quality, schedule milestones, necessary meetings, and the need for supporting information and data essential to the project’s completion. The CONSULTANT shall ensure that meetings achieve the objectives of the OWNER and NCDOA, and that prepared agendas, supporting materials, and minutes are provided in a timely manner. Regular monthly project status reports shall be prepared by the Project Manager for review by the OWNER and NCDOA. 2. Planning Services i. Project Justification Study a. Project Description – Based on input from the OWNER and Project Team, a detailed description of all project components will be developed. This description will be written for intended use in the EA and will include a discussion of anticipated connected actions. b. Purpose and Need – The need for the proposed improvements at HRJ will be evaluated in accordance with FAA Orders 1050.1F, Environmental Impacts: Policies and Procedures, and 5050.4B, National Environmental Policy Act (NEPA) Implementing Instructions. The resulting statement of purpose and need will be written for intended use in the EA and will serve as the benchmark against which project alternatives are evaluated. c. Runway Length Justification – A runway length analysis was performed in accordance with FAA AC 150/5325-4B for the recently approved AMPU. This existing information will be reviewed and updated as appropriate based on existing operational data, and fleet mix. Supporting evaluation of the critical aircraft will be completed, including consideration of a group of aircraft. • Airport Users Survey More detailed information regarding aircraft operations at HRJ will be collected to supplement the runway length analysis that was completed as part of the AMPU. Current airport user information will be collected, such as based aircraft or change in facility use (i.e. new flight school). An airport user survey will be prepared and distributed to better understand the needs of existing users, including:  current constraints placed on a potential user HCBOC 031725 Pg. 61 Parrish and Partners Scope of Work Runway 5-23 Improvement Program - Pre-NEPA (Grant No. TBD) HRJ - Work Authorization No. 6 Page 4 of 7 February 2025 (payload/stage length);  projected number of annual operations by specific aircraft if project is built;  stage length of projected operations;  airfield and landside facilities needed to meet the anticipated activity level, including runway length and approach minima. d. Alternatives Analysis – an alternatives analysis was performed for the recently approved AMPU. This information will be reviewed and compared to NEPA guidelines provided in FAA Orders 1050.1F and 5050.4B. Supplemental studies will be performed to provide the basis for evaluating potential impacts and comparing the alternatives. Anticipated supplemental studies include: • Land Use – available databases, zoning information, and resource materials, including previous planning/environmental reports and permits completed for HRJ will be reviewed. A site visit will be conducted to evaluate existing land use in the study area • Natural Resources - A wetland/stream delineation will be performed to define the jurisdictional limits of on-site Waters of the United States. The delineation will be based on the three required parameters set forth in the USACE 1987 Wetland Delineation Manual. The boundaries of the potentially jurisdictional areas will be flagged and mapped using sub-meter accuracy Global Positioning System (GPS) equipment. A wetland/stream map depicting the wetland boundaries in relation to study area boundaries will be produced. Concurrently with the wetlands field survey, the study area will also be evaluated for potentially suitable habitat for federally protected species or the species themselves. • Cultural Resources – A National Historic Preservation Act Section 106 Review Request will be submitted to the North Carolina SHPO to determine if a cultural resources survey is needed for the proposed project. If the SHPO decides that a survey should be done, a Phase I cultural resources survey will be included in the EA Scope of Services. Narrative text will be developed that summarizes the results of the updated Alternatives Analysis and provides sufficient information to allow the decision maker to determine which alternatives meet the purpose and need of the project. The narrative will include:  A description of the No-build Alternative and inability to meet the project purpose and need  Identification of Preliminary Alternatives that were HCBOC 031725 Pg. 62 Parrish and Partners Scope of Work Runway 5-23 Improvement Program - Pre-NEPA (Grant No. TBD) HRJ - Work Authorization No. 6 Page 5 of 7 February 2025 considered but eliminated from further study and the reasoning as to why they were eliminated  Identification of the Reasonable Alternatives for the proposed project; and  A statement identifying the Pre-NEPA Preferred Alternative e. Feasibility Assessment – An assessment of the technical feasibility of constructing the Pre-NEPA Preferred Alternative will be performed, including site constraints, design considerations, and potential engineering challenges. f. Community Assessment - The proposed project will be evaluated to determine the potential impacts to the social and economic characteristics of the affected communities. Socioeconomic data will be obtained from the US Census Bureau, Woods and Poole, and local comprehensive land use plans. This data includes demographic characteristics of communities in the vicinity of the project area, as well as economic information such as income and employment, along with projected trends and growth. Potential socioeconomic impacts, such as relocations or changing transportation patterns, will be evaluated. ii. RPZ Alternatives Evaluation and ALP/AMPU - The recently approved AMPU includes an RPZ Alternatives Evaluation. This existing information will be utilized as planning documentation for the subject project. iii. Cost-Benefit Analysis a. Information regarding the County’s economic and aviation-related development goals will be reviewed based on interviews and data collection. b. Preliminary cost estimates will be prepared for the Pre-NEPA Preferred Alternative and Reasonable Alternatives. Anticipated benefits of the proposed Runway 5-23 Runway Improvement Program will be identified, such as improved airport safety, increased runway operational efficiency, and economic impacts. c. Projected costs and benefits will be compared. The effort will include a determination of the appropriate evaluation period, quantification and comparison of benefits and costs of alternatives relative to the No-build. 3. NEPA Scoping Memo Preparation The NCDOA NEPA Study Scoping Memo Template will be completed. The NEPA Study Scoping Memo must be reviewed and approved by the NCDOT Aviation HCBOC 031725 Pg. 63 Parrish and Partners Scope of Work Runway 5-23 Improvement Program - Pre-NEPA (Grant No. TBD) HRJ - Work Authorization No. 6 Page 6 of 7 February 2025 Planning & Environmental Program Manager prior to NCDOT Aviation approving the scope of work for advancing the NEPA study. Once the NEPA study advances, the memo will be used in project scoping activities with coordinating agencies. i. The NEPA Scoping Memo will be prepared based on the Planning Services completed under Task 2 and will include the following information: a. A preliminary project description. b. A project justification/purpose and need statement that explicitly identifies whether the Project meets FAA justification criteria at the time of Project initiation. c. The full range of alternatives to be evaluated in the NEPA document. d. The likely/potential permit requirements. e. Identification of all participating and coordinating agencies (in addition to the FAA). f. Potentially impacted environmental resources and mitigation strategies for any potentially significant effects. g. Community and local stakeholders affected by the proposed project, including the type and extent of public involvement to be conducted. h. A schedule mapping out completion of the EA within one year, including milestones for all formal coordination, field reviews/concurrences, specialized studies such as protected species surveys, and other authorizations that will be required. The schedule will account for the requirement that impact analysis in the EA must be based on a minimum of 30% preliminary project designs. ii. Documentation The NCDOA NEPA Study Scoping Memo Template will be completed to present the findings of the previously defined scope items and submitted in draft, final draft and final form, in electronic versions, as appropriate. a. Draft Submittal to the OWNER and NCDOA for review and comment - One (1) electronic PDF copy of the Narrative Report b. Final Draft Submittal to NCDOA for review and comment - One (1) electronic copy of the Final Draft Narrative Report will be provided to NCDOA and be inclusive of comments made by NCDOA on the draft submittal. c. Final Submittal to the OWNER and NCDOA for review and HCBOC 031725 Pg. 64 Parrish and Partners Scope of Work Runway 5-23 Improvement Program - Pre-NEPA (Grant No. TBD) HRJ - Work Authorization No. 6 Page 7 of 7 February 2025 approval - Five (5) reproductions of the Final Narrative Report will be provided with signature approvals to NCDOA (one copy), Airport Sponsor (two copies), and CONSULTANT (one copy). 4. Schedule The NEPA Study Scoping Memo will be submitted for approval by the NCDOA approximately 6 months after PARRISH & PARTNERS receives the notice-to- proceed from the OWNER. III. BASIS OF COMPENSATION: The OWNER agrees to compensate the CONSULTANT for services performed for the work described herein as follows: A. SPECIAL SERVICES: 1. General Services: As compensation for providing General Services, the OWNER shall pay the CONSULTANT the lump sum fee of Fifteen Thousand Seven Hundred Ninety-four Dollars and No Cents ($15,794.00). 2. Planning Studies: As compensation for providing Planning Study Services, the OWNER shall pay the CONSULTANT the lump sum fee of Seventy-six Thousand One Hundred Eighty-five Dollars and No Cents ($76,185.00). 3. NEPA Scoping Memo: As compensation for providing NEPA Scoping Memo services, the OWNER shall pay the CONSULTANT the lump sum fee of Fifteen Thousand Forty-five Dollars and No Cents ($15,045.00). The total amount of Work Authorization No. 6 is One Hundred Seven Thousand Twenty-four Dollars and No Cents ($107,024.00). Agreed as to scope of services, time schedule, and budget: _____________________________________ ______________________________________ For: HARNETT COUNTY For: PARRISH AND PARTNERS OF NORTH CAROLINA, PLLC Date: ________________________________ Date: _________________________________ Attachment: Exhibit A - Professional Services Fee Summary HCBOC 031725 Pg. 65 Page 1 of 4 PROJECT DESCRIPTION: HRJ Runway 5-23 Improvement Program Pre-NEPA Planning Studies DATE PREPARED:February 21, 2025 PREPARED BY: Parrish and Partners of North Carolina, PLLC TIP NUMBER: TBD 1.0 GENERAL SERVICES SubTotal:$15,794.00 2.0 PLANNING SERVICES SubTotal:$76,185.00 3.0 NEPA SCOPING MEMO PREPARATION SubTotal:$15,045.00 Total $107,024.00 Total WA No. 4 Lump Sum Amount $107,024.00 Exhibit A - Professional Services Fee Summary Harnett Regiona Jetport (HRJ)Printed: 2/21/2025HCBOC 031725 Pg. 66 Page 2 of 4 DATE PREPARED:February 21, 2025 SPECIAL SERVICES (A104) PLANNING SERVICES TASK DESCRIPTION CADD Technician/Aviation Project Sr. PM PM/Sr. Engineer Engineer Civil Associate Designer Assistant SUBTOTAL 1.0 GENERAL SERVICES a Prepare Scope, Fee, & Schedule 2 8 4 14 b NCDOA Grant Setup 4 4 c GA Development Checklist (AV100 and AV101)4 4 d Partner Connect Data Entry 8 8 e Complete RFA Package 8 8 f Project Coordination with NCDOA APM 2 8 10 g Post Award Project and Grant Management 4 32 36 h Airport Site Visit 8 8 16 SUBTOTAL HOURS/CLASSIFICATION:2 22 12 0 0 64 100 BASIC HOURLY RATE $76.08 $74.06 $53.87 $30.47 $32.81 $34.88 TOTAL PER CLASSIFICATION $152.16 $1,629.32 $646.44 $0.00 $0.00 $2,232.32 $0.00 Total Labor Cost (Without Multiplier)$4,660.24 Audited Overhead Rate 193.07%$8,997.53 Subtotal $13,657.77 (1) Profit 11%$1,502.35 (2) Cost of Capital 0.18%24.58 (3) TOTAL (1) + (2) + (3)$15,184.70 NON-SALARY COSTS A. Reimbursable Expense Quantity Unit Rate Subtotal Mileage (1 trip, from Columbia and Charleston)910 Miles $0.670 $609.70 Xerox Copies 0 EA $0.09 $0.00 Mailing 0 EA $25.00 $0.00 Reproduction - Bond Plans 0 EA $3.50 $0.00 B. Subcontracting Expenses Amount Contract Type Subtotal TOTAL DIRECT NON-SALARY COST:$609.70 Lump Sum Amount $15,794.00 PROJECT DESCRIPTION: HRJ Runway 5-23 Improvement Program Pre-NEPA Planning Studies PREPARED BY: Parrish and Partners of North Carolina, PLLC TASK NUMBEREmployee Classifications Total:$15,794.40 Page 2 1. General ServicesHCBOC 031725 Pg. 67 Page 3 of 4 DATE PREPARED:February 21, 2025 BASIC SERVICES (A104) PLANNING SERVICES TASK DESCRIPTION CADD Technician/Aviation Project Sr. PM PM/Sr. Engineer Engineer Civil Associate Designer Assistant SUBTOTAL 2.0 PLANNING SERVICES i.Project Justification Study a.Project Description 1 10 4 4 19 b Purpose and Need 12 4 8 24 c Runway Length Justification 1 4 12 16 33 Airport Users Survey 1 8 16 24 49 d Alternatives Analysis 6 6 16 28 Land Use 8 10 18 Natural Resources 2 2 4 Cultural Resources 1 4 5 e Feasibility Assessment 2 4 10 4 20 f Community Assessment 2 4 10 16 ii RPZ Alternatives Evaluation and ALP/AMPU iii Cost-Benefit Analysis a Economic Development Goals 4 4 2 10 b Cost-Benefit Determination 4 10 16 30 c Cost-Benefit Comparison 4 10 16 30 SUBTOTAL HOURS/CLASSIFICATION:13 81 92 100 0 0 286 BASIC HOURLY RATE $76.08 $74.06 $53.87 $30.47 $32.81 $34.88 TOTAL PER CLASSIFICATION $989.04 $5,998.86 $4,956.04 $3,047.00 $0.00 $0.00 $0.00 Total Labor Cost (Without Multiplier)$14,990.94 Audited Overhead Rate 193.07%$28,943.01 Subtotal $43,933.95 (1) Profit 11%$4,832.73 (2) Cost of Capital 0.14%61.51 (3) TOTAL (1) + (2) + (3)$48,828.19 NON-SALARY COSTS A. Reimbursable Expense Quantity Unit Rate Subtotal Mileage (1 Trip, from Columbia)410 Miles $0.575 $235.75 Reproduction - Xerox B&W Copies 0 EA $0.09 $0.00 Reproduction - Color Copies 50 EA $0.83 $41.50 Mailing 0 EA $25.00 $0.00 Report Binding, Cover and Spine 0 EA $3.50 $0.00 Reproduction - Bond (24"x36")0 SF $0.42 $0.00 Reproduction - Color Bond (24"x36")0 SF $3.00 $0.00 B. Subcontracting Expenses Amount Contract Type Fixed Fee Subtotal Robbins & DeWitt - Natural Resources Field Work $1.00 $27,080.00 $27,080.00 TOTAL DIRECT NON-SALARY COST:$27,357.25 Lump Sum Amount $76,185.00 PROJECT DESCRIPTION: HRJ Runway 5-23 Improvement Program Pre-NEPA Planning Studies PREPARED BY: Parrish and Partners of North Carolina, PLLC TASK NUMBEREmployee Classifications Total:$76,185.44 Harnett Regional Jetport (HRJ)Printed: 2/21/2025 HCBOC 031725 Pg. 68 Page 4 of 4 DATE PREPARED:February 21, 2025 BASIC SERVICES (A104) PLANNING SERVICES TASK DESCRIPTION CADD Technician/Aviation Project Sr. PM PM/Sr. Engineer Engineer Civil Associate Designer Assistant SUBTOTAL 3.0 NEPA SCOPING MEMO PREPARATION i.NEPA Scoping Memo a Preliminary Project Description 2 2 4 b Project Justification/Purpose and Need 2 2 4 c Alternatives 2 2 4 d Permit Requirements 1 4 5 e Agency Partners 1 4 5 f Environmental Impacts/Mitigation 8 8 10 26 g Community Stakeholders 1 4 5 h EA Schedule Formulation 2 6 4 12 ii.Documentation 0 a Draft Submittal 1 2 1 4 8 b Final Draft Submittal 2 1 4 7 c Final Submittal 1 2 1 4 8 0 0 0 SUBTOTAL HOURS/CLASSIFICATION:4 29 21 34 0 0 88 BASIC HOURLY RATE $76.08 $74.06 $53.87 $30.47 $32.81 $34.88 TOTAL PER CLASSIFICATION $304.32 $2,147.74 $1,131.27 $1,035.98 $0.00 $0.00 $0.00 Total Labor Cost (Without Multiplier)$4,619.31 Audited Overhead Rate 193.07%$8,918.50 Subtotal $13,537.81 (1) Profit 11%$1,489.16 (2) Cost of Capital 0.14%18.95 (3) TOTAL (1) + (2) + (3)$15,045.92 NON-SALARY COSTS A. Reimbursable Expense Quantity Unit Rate Subtotal Mileage (0 Trips)0 Miles $0.575 $0.00 Reproduction - Xerox B&W Copies 0 EA $0.09 $0.00 Reproduction - Color Copies 50 EA $0.83 $41.50 Mailing 0 EA $25.00 $0.00 Report Binding, Cover and Spine 0 EA $3.50 $0.00 Reproduction - Bond (24"x36")0 SF $0.42 $0.00 Reproduction - Color Bond (24"x36")0 SF $3.00 $0.00 B. Subcontracting Expenses Amount Contract Type Fixed Fee Subtotal TOTAL DIRECT NON-SALARY COST: Lump Sum Amount $15,045.00 PROJECT DESCRIPTION: HRJ Runway 5-23 Improvement Program Pre-NEPA Planning Studies PREPARED BY: Parrish and Partners of North Carolina, PLLC TASK NUMBEREmployee Classifications Total:$15,045.92 Harnett Regional Jetport (HRJ)Printed: 2/21/2025 HCBOC 031725 Pg. 69 \\lecfile\department\Admin\Clerk to the Board docs\AGENDAS\2025\031725 m\6.1 agendaform2025_PLAN2501- 0002.docx Page 1 of 1 Board Meeting Agenda Item MEETING DATE: March 17, 2025 TO: HARNETT COUNTY BOARD OF COMMISSIONERS SUBJECT: Proposed Text Amendment: Case # PLAN 2501-0002 REQUESTED BY: Mark Locklear, Development Services REQUEST: Proposed Text Amendment Applicant: Harnett County Development Services; Harnett County Unified Development Ordinance; Article IV “Zoning & Overlay Districts” Section 2.0 “Zoning Map”. Additional Information: At the March 3, 2025 Planning Board meeting, the board voted unanimously (4-0) to recommend approval of the text amendment as proposed. There was no one present to speak in opposition. FINANCE OFFICER’S RECOMMENDATION: COUNTY MANAGER’S RECOMMENDATION: Item 6 HCBOC 031725 Pg. 70 Page 1 of 2 TEXT AMENDMENT REQUEST FORM (Internal) Development Services 420 McKinney Pkwy. P.O. Box 65, Lillington, NC 27546 Phone: (910) 893-7525 Fax: (910) 893-2793 Case: PLAN2501-0002 Planning Board: March 3, 2025 County Commissioners: March 17, 2025 Applicant Information Applicant: Name: Harnett County Development Services Address: 420 McKinney Pkwy. City/State/Zip: Lillington, NC 27546 Phone: 910-893 -7525, x2 Type of Change New Addition Revision Ordinance: Unified Development Ordinance Article: IV. Sections: 2.0 Current Text: SECTION 2.0 ZONING MAP The map herein referred to, which is identified by the title, Official Zoning Map of Harnett County, North Carolina, shall be known as the zoning map. The map shall bear the adoption date of this Ordinance and the date of any subsequent map amendments. It shall be kept filed at the County Department of GIS & Land Records and shall bear the adoption date of this Ordinance and the date of any subsequent map amendments. Proposed Text: SECTION 2.0 ZONING MAP The map herein referred to, which is identified by the title, Official Zoning Map of Harnett County, North Carolina, shall be known as the zoning map and may only be amended in accordance with the provisions of this UDO. The map shall bear the adoption date of this Ordinance and the date of any subsequent map amendments. It A current version of the zoning map shall be maintained in a digital format kept filed at by the County Department of GIS and made publicly available on the GIS Department website. & Land Records and shall bear the adoption date of this Ordinance and the date of any subsequent map amendments. The County Clerk may, upon validation by the Planning Director, or designee, certify a paper copy of the Official Zoning Map, or portions of the map, as a true and accurate copy of the Official Zoning Map, or a portion thereof, under the authority of GS § 153A-50. Reason for Requested Change: To amend Harnett County’s U.D.O. Article IV. Zoning & Overlay Districts, Section 2.0, to meet the requirements of GS § 153A-50. HCBOC 031725 Pg. 71 Page 2 of 2 Suggested Statement-of-Consistency: (Staff concludes that…) The requested Text Amendment is compatible with Harnett County regulatory documents and GS § 153A-50, and the benefits outweigh any potential inconvenience or harm to the community. Therefore, it is recommended that this Text Amendment request be APPROVED. Additional Information: At the March 3, 2025 Planning Board, the Board voted unanimously (4-0) to recommend approval of the text amendment as proposed by staff. The Planning Board found that the requested text amendment is compatible with the Harnett County Regulatory Documents and GS § 153A-50. HCBOC 031725 Pg. 72 Harnett County Board of Commissioners Page | 1 AN ORDINANCE AMENDING THE HARNETT COUNTY UNIFIED DEVELOPMENT ORDINANCE WHEREAS, the Board of Commissioners of Harnett County adopted the UDO on October 17, 2011 for the purpose of promoting the health, safety, and general welfare of the county residents; and WHEREAS, this ordinance was adopted under authority granted by the General Assembly of the State of North Carolina, particularly G.S. 153A-340; and WHEREAS, the UDO contains provisions for amending said ordinance and those provisions have been followed; and WHEREAS, the Harnett County Planning Board has reviewed the amendment to the article of the UDO as listed below and recommends the adoption of the following amendment. NOW, THEREFORE BE IT ORDAINED BY THE BOARD OF COMMISSIONERS OF HARNETT COUNTY, NORTH CAROLINA that Harnett County Unified Development Ordinance Article IV., Section 2.0. shall be amended to read as indicated in “Attachment”. “Attachment” is filed with the Unified Development Ordinance in the Clerk to the Board’s Office. Duly adopted this 17th day of March 2025 and effective upon adoption. HARNETT COUNTY BOARD OF COMMISSIONERS _______________________________ Matthew Nicol, Chairman ATTEST: ____________________________________ Melissa D. Capps, Clerk HCBOC 031725 Pg. 73 Harnett County Board of Commissioners Page | 2 ATTACHMENT SECTION 2.0 ZONING MAP The map herein referred to, which is identified by the title, Official Zoning Map of Harnett County, North Carolina, shall be known as the zoning map and may only be amended in accordance with the provisions of this UDO. A current version of the zoning map shall be maintained in a digital format by the County Department of GIS and made publicly available on the GIS Department website. The County Clerk may, upon validation by the Planning Director, or designee, certify a paper copy of the Official Zoning Map, or portions of the map, as a true and accurate copy of the Official Zoning Map, or a portion thereof, under the authority of GS § 153A-50. HCBOC 031725 Pg. 74 \\lecfile\department\Admin\Clerk to the Board docs\AGENDAS\2025\031725 m\7.1 agendaform_PLAN2502-0001.docx Page 1 of 1 Board Meeting Agenda Item MEETING DATE: March 17, 2025 TO: HARNETT COUNTY BOARD OF COMMISSIONERS SUBJECT: Proposed Text Amendment: Case # PLAN 2502-0001 REQUESTED BY: Mark Locklear, Development Services REQUEST: Proposed Text Amendment Applicant: Harnett County Development Services; Harnett County Unified Development Ordinance; Article III “Development & Subdivision Review, Permitting & Approval Requirements” Section 8.2.3 “Subdivision & Plat Requirements” & 8.4.1 “Review for Minor Subdivision” Additional Information: At the March 3, 2025 Planning Board meeting, the board voted unanimously (4-0) to recommend approval of the proposed text amendment. There was no one present to speak in opposition. FINANCE OFFICER’S RECOMMENDATION: COUNTY MANAGER’S RECOMMENDATION: Item 7 HCBOC 031725 Pg. 75 Page 1 of 3 TEXT AMENDMENT REQUEST FORM (Internal) Development Services 420 McKinney Pkwy. P.O. Box 65, Lillington, NC 27546 Phone: (910) 893-7525 Fax: (910) 893-2793 Case: PLAN2502-0001 Planning Board: March 3, 2025 County Commissioners: March 17, 2025 Applicant Information Applicant: Name: Harnett County Development Services Address: 420 McKinney Pkwy. City/State/Zip: Lillington, NC 27546 Phone: 910-893 -7525, x2 Type of Change New Addition Revision Ordinance: Unified Development Ordinance Article: III. Sections: 8.2.3 & 8.4.1 Current Text: SECTION 8.0 SUBDIVISION REVIEW PRODCEDURES 8.2.3 Subdivision Plat/Plan Requirements In order for a subdivision plat/plan, exempt map, or master sketch plan to be considered complete, the applicant shall submit a site plan according to the table below: 8.4 Minor Subdivision Procedures 8.4.1 Review for Minor Subdivisions A. The Planning Department shall establish standard regulations for plan submittal and review including but not limited to the number of copies requested and the information to be included on the plan. The Administrator shall advise the subdivider or his authorized agent of the regulations pertaining to the proposed subdivision and the procedures to be followed in the preparation and submittal of the final plat. B. The Administrator shall submit a copy of the plan, and any accompanying material to other officials and agencies concerned with new development including, but not limited to: 1. Harnett County Public Health Department 2. Harnett County Public Utilities Department EXEMPT PLAT MINOR SUBDIVISION PRELIMINARY SUBDIVISION FINAL SUBDIVISION MASTER SKETCH PLAN DEVELOPMENT REQUIREMENTS Preliminary Soils Report Provided, If Applicable X X X HCBOC 031725 Pg. 76 Page 2 of 3 3. Harnett County Fire Code Official 4. Harnett County GIS/E-911 Addressing Operations Administrator 5. NCDOT District Highway Engineer 6. North Carolina Department of Environment and Natural Resources Quality C. The Administrator shall review the plan for general compliance with the requirements of this Ordinance. D. One (1) copy of the plan shall be returned to the subdivider or his authorized agent. Proposed Text: SECTION 8.0 SUBDIVISION REVIEW PRODCEDURES 8.2.3 Subdivision Plat/Plan Requirements In order for a subdivision plat/plan, exempt map, or master sketch plan to be considered complete, the applicant shall submit a site plan according to the table below: 8.4 Minor Subdivision Procedures 8.4.1 Review for Minor Subdivisions A. The Planning Department shall establish standard regulations for plan submittal and review including but not limited to the number of copies requested and the information to be included on the plan. The Administrator shall advise the subdivider or his authorized agent of the regulations pertaining to the proposed subdivision and the procedures to be followed in the preparation and submittal of the final plat. B. The Administrator shall submit a copy of the plan, and any accompanying material to other officials and agencies concerned with new development including, but not limited to: 7. Harnett County Public Health Department 8. Harnett County Public Utilities Department Regional Water 9. Harnett County Fire Code Official 10. Harnett County GIS/E-911 Addressing Operations Administrator 11. NCDOT District Highway Engineer North Carolina Department of Transportation 12. North Carolina Department of Environmental and Natural Resources Quality C. The Administrator shall review the plan for general compliance with the requirements of this Ordinance. D. One (1) copy of the plan shall be returned to the subdivider or his authorized agent. E. A soils evaluation shall be submitted, completed by a professional licensed to perform such work . The soil s evaluation shall address all newly proposed lots and verify that sufficient useable soil is present for initial and repair areas, as required by 15A NCAC 18 E. For lots with existing septic systems, the evaluation shall verify that the existing system meets all required setbacks to the new property lines and sufficient septic repair area exists, as required by 15A NCAC 18E. Reason for Requested Change: EXEMPT PLAT MINOR SUBDIVISION PRELIMINARY SUBDIVISION FINAL SUBDIVISION MASTER SKETCH PLAN DEVELOPMENT REQUIREMENTS Preliminary Soils Report Provided, If Applicable X X X X HCBOC 031725 Pg. 77 Page 3 of 3 To amend Harnett County’s U.D.O. Article III. Section 8.2.3 & 8.4.1 to explicitly state that a soil report is required for all minor subdivisions. The proposed text amendment is necessary to add language mistakenly omitted from the Unified Development Ordinance and will not result in any change in practice. Suggested Statement-of-Consistency: (Staff concludes that…) The requested Text Amendment is compatible with Harnett County regulatory documents and 15A NCAC 18 E Wastewater Treatment and Dispersal Systems, and is an important measure for protecting public health and safety. Therefore, it is recommended that this Text Amendment request be APPROVED. Additional Information: At the March 3, 2025 Planning Board hearing, the Board voted unanimously (4-0) to recommend approval based on compliance with Harnett County Regulatory documents, 15A NCAC 18 E Wastewater Treatment and Dispersal Systems, and to protect public health and safety. HCBOC 031725 Pg. 78 Harnett County Board of Commissioners Page | 1 AN ORDINANCE AMENDING THE HARNETT COUNTY UNIFIED DEVELOPMENT ORDINANCE WHEREAS, the Board of Commissioners of Harnett County adopted the UDO on October 17, 2011 for the purpose of promoting the health, safety, and general welfare of the county residents; and WHEREAS, this ordinance was adopted under authority granted by the General Assembly of the State of North Carolina, particularly G.S. 153A-340; and WHEREAS, the UDO contains provisions for amending said ordinance and those provisions have been followed; and WHEREAS, the Harnett County Planning Board has reviewed the amendment to the article of the UDO as listed below and recommends the adoption of the following amendment. NOW, THEREFORE BE IT ORDAINED BY THE BOARD OF COMMISSIONERS OF HARNETT COUNTY, NORTH CAROLINA that Harnett County Unified Development Ordinance Article III., Sections 8.2.3 & 8.4.1, shall be amended to read as indicated in “Attachment”. “Attachment” is filed with the Unified Development Ordinance in the Clerk to the Board’s Office. Duly adopted this 17th day of March 2025 and effective upon adoption. HARNETT COUNTY BOARD OF COMMISSIONERS _______________________________ Matthew Nicol, Chairman ATTEST: ____________________________________ Melissa D. Capps, Clerk HCBOC 031725 Pg. 79 Harnett County Board of Commissioners Page | 2 ATTACHMENT SECTION 8.0 SUBDIVISION REVIEW PRODCEDURES 8.2.3 Subdivision Plat/Plan Requirements In order for a subdivision plat/plan, exempt map, or master sketch plan to be considered complete, the applicant shall submit a site plan according to the table below: 8.4 Minor Subdivision Procedures 8.4.1 Review for Minor Subdivisions A. The Planning Department shall establish standard regulations for plan submittal and review including but not limited to the number of copies requested and the information to be included on the plan. The Administrator shall advise the subdivider or his authorized agent of the regulations pertaining to the proposed subdivision and the procedures to be followed in the preparation and submittal of the final plat. B. The Administrator shall submit a copy of the plan, and any accompanying material to other officials and agencies concerned with new development including, but not limited to: 1. Harnett County Health Department 2. Harnett County Regional Water 3. Harnett County Fire Code Official 4. Harnett County GIS/E-911 Addressing Operations Administrator 5. North Carolina Department of Transportation 6. North Carolina Department of Environmental Quality C. The Administrator shall review the plan for general compliance with the requirements of this Ordinance. D. One (1) copy of the plan shall be returned to the subdivider or his authorized agent. E. A soils evaluation shall be submitted, completed by a professional licensed to perform such work. The soils evaluation shall address all newly proposed lots and verify that sufficient useable soil is present for initial and repair areas, as required by 15A NCAC 18 E. For lots with existing septic systems, the evaluation shall verify that the existing system meets all required setbacks to the new property lines and sufficient septic repair area exists, as required by 15A NCAC 18E. EXEMPT PLAT MINOR SUBDIVISION PRELIMINARY SUBDIVISION FINAL SUBDIVISION MASTER SKETCH PLAN DEVELOPMENT REQUIREMENTS Preliminary Soils Report Provided, If Applicable X X X X HCBOC 031725 Pg. 80 NOTICE OF PUBLIC HEARING The Board of Commissioners (the “Board”) of the County of Harnett, North Carolina (the “County”) is considering (1) entering into an installment financing contract in an amount not to exceed $91,000,000 (the “Contract”) to finance the construction, equipping, and furnishing of school facilities in the County (the “2025 Project”), including, but not limited to, Flatwoods Middle School (the “School”) and (2) executing and delivering a Deed of Trust, Security Agreement and Fixture Filing (the “Deed of Trust”) related to the County’s fee simple interest in the School, together with the improvements and fixtures thereon (collectively, the “Mortgaged Property”), as may be required by the entity providing the funds to the County under the Contract. The 2025 Project will be located at the intersection of Joel Johnson Road and US 401 in Lillington, North Carolina 27546. The Mortgaged Property identified above will be mortgaged under the Deed of Trust. The Contract and the Deed of Trust permit the County to enter into amendments to finance additional projects using the Mortgaged Property as collateral and the County may or may not grant additional collateral in connection with such amendments. On payment by the County of all installment payments due under the Contract, including any future amendments to finance or refinance projects, the Deed of Trust and any lien created thereunder will terminate and the County’s title to the Mortgaged Property will be unencumbered. NOTICE IS HEREBY GIVEN, pursuant to Sections 160A-20 of the General Statutes of North Carolina, that on March 17, 2025 at 6:00 p.m. in the Board Chambers of the Harnett County Resource Center and Library, 455 McKinney Parkway, Lillington, North Carolina, a public hearing will be conducted concerning the approval of the execution and delivery of the Contract and the 2025 Project financed thereby. All interested parties are invited to present comments thereon at the public hearing. /s/ MELISSA CAPPS Clerk to the Board of Commissioners County of Harnett, North Carolina Published: March 4,2025 Item 8 HCBOC 031725 Pg. 81 HCBOC 031725 Pg. 82 HCBOC 031725 Pg. 83 HCBOC 031725 Pg. 84 HCBOC 031725 Pg. 85 HCBOC 031725 Pg. 86 HCBOC 031725 Pg. 87 \\lecfile\department\Admin\Clerk to the Board docs\AGENDAS\2025\031725 m\9.1 Agenda Form_Flatwoods Middle School_Approving Resolution_03.17.2025.docx Page 1 of 1 Board Meeting Agenda Item MEETING DATE: March 17, 2025 TO: HARNETT COUNTY BOARD OF COMMISSIONERS SUBJECT: Flatwoods Middle School Approving Resolution REQUESTED BY: Kimberly Honeycutt, CLGFO REQUEST: That the Board of Commissioners approve the attached resolution approving an installment finanicng contract and delivery thereof and providing for certain other related matters as it relates to the construction of a new middle school. FINANCE OFFICER’S RECOMMENDATION: Approve attached resolution. COUNTY MANAGER’S RECOMMENDATION: Item 9 HCBOC 031725 Pg. 88 PPAB 11973580V4 EXTRACTS FROM MINUTES OF BOARD OF COMMISSIONERS * * * A regular meeting of the Board of Commissioners (the “Board”) of the County of Harnett, North Carolina (the “County”) was held on Monday, March 17, 2025, at 6:00 p.m. in the Board Chambers of the Harnett County Resource Center and Library, 455 McKinney Parkway, Lillington, North Carolina, Matt Nicol, Chairman of the Board, presiding. Commissioners present: Commissioners absent: Also present: * * * * * * Commissioner moved that the following resolution (the “Resolution”), a copy of which was available with the Board and which was read by title, be adopted: RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, APPROVING AN INSTALLMENT FINANCING CONTRACT AND DELIVERY THEREOF AND PROVIDING FOR CERTAIN OTHER RELATED MATTERS WHEREAS, the County of Harnett, North Carolina (the “County”) is a validly existing political subdivision, existing as such under and by virtue of the Constitution, statutes and laws of the State of North Carolina (the “State”); WHEREAS, the County has the power, pursuant to the General Statutes of North Carolina to (1) enter into installment contracts in order to purchase, or finance or refinance the purchase of, real or personal property and to finance or refinance the construction or repair of fixtures or improvements on real property and (2) create a security interest in some or all of the property financed or refinanced to secure repayment of the money advanced therefor; WHEREAS, the Board of Commissioners of the County (the “Board”) has previously determined that it is in the best interest of the County to enter into an Installment Financing Contract (the “Contract”) with the Harnett County Public Facilities Corporation (the “Corporation”) to finance the construction, equipping, and furnishing of school facilities in the County (the “2025 Project”), including, but not limited to, Flatwoods Middle School (the “School”); WHEREAS, it is in the best interest of the County to enter into a Deed of Trust, Security Agreement and Fixture Filing (the “Deed of Trust”) related to the County’s fee simple interest in the real property on which the School will be located, together with the improvements thereon (the “Mortgaged Property”), that will provide security for the County’s obligations under the Contract; WHEREAS, to enable the County to enter into the Contract, the Harnett County Board of Education (the “Board of Education”) must first convey to the County ownership of the Mortgaged Property so that HCBOC 031725 Pg. 89 2 PPAB 11973580V4 the County may secure its obligations under the Contract pursuant to the Deed of Trust and grant a lien on the Mortgaged Property; WHEREAS, pursuant to a Lease and Agency Agreement (the “Lease Agreement”)], between the Board of Education and the County, (1) the Board of Education will lease the Mortgaged Property back from the County for a term of years, at the end of which the County will convey title to the Mortgaged Property back to the Board of Education, and (2) the County will designate the Board of Education as its agent to carry out the construction and completion of the 2025 Project; WHEREAS, in furtherance of the above plan, the Corporation will execute and deliver its Limited Obligation Bonds (County of Harnett, North Carolina), Series 2025 (the “2025 Bonds”) in an aggregate principal amount not to exceed $91,000,000, evidencing proportionate undivided interests in rights to receive certain Revenues (as defined in the Contract), under the terms of an Indenture of Trust (the “Indenture”) between the Corporation and U.S. Bank Trust Company, National Association, as trustee; WHEREAS, in connection with the sale of the 2025 Bonds by the Corporation to PNC Capital Markets LLC and Robert W. Baird & Co., Inc. (collectively, the “Underwriters”), the Corporation will enter into a Contract of Purchase to be dated the delivery date thereof (the “Contract of Purchase”) between the Corporation and the Underwriters, and the County will execute a Letter of Representation to the Underwriter with respect to the 2025 Bonds (the “Letter of Representation”); WHEREAS, there have been described to the Board the forms of the following documents (collectively, the “Instruments”), copies of which have been made available to the Board, which the Board proposes to approve, enter into and deliver, as applicable, to effectuate the proposed installment financing: (1) the Contract; (2) the Indenture, including the form of the 2025 Bonds; (3) the Deed of Trust; (4) the Letter of Representation; and (5) the Lease Agreement. WHEREAS, to make an offering and sale of the 2025 Bonds, there will be prepared a Preliminary Official Statement with respect to the 2025 Bonds (the “Preliminary Official Statement”), a draft thereof having been presented to the Board, and a final Official Statement relating to the Preliminary Official Statement (together with the Preliminary Official Statement, the “Official Statement”), which Official Statement will contain certain information regarding the County; WHEREAS, it appears that each of the Instruments and the Preliminary Official Statement is in an appropriate form and is an appropriate instrument for the purposes intended; WHEREAS, a public hearing on the Contract, Deed of Trust, and the 2025 Project to be financed thereby, after publication of a notice with respect to such public hearing, must be held and the Board conducted such public hearing at this meeting; HCBOC 031725 Pg. 90 3 PPAB 11973580V4 WHEREAS, the County will file an application to the North Carolina Local Government Commission (the “LGC ”) for approval of the Contract; WHEREAS, Parker Poe Adams & Bernstein LLP, as bond counsel, will render an opinion to the effect that entering into the Contract and the transactions contemplated thereby are authorized by law; NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, AS FOLLOWS: Section 1. Ratification of Instruments. All actions of the County, the Chair of the Board (the “Chair”), the Clerk to the Board (the “Clerk”), the County Manager, the Finance Officer, the County Attorney, and their respective designees, whether previously or hereinafter taken, in effectuating the proposed financing, including the making of application to the LGC, are approved, ratified and authorized pursuant to and in accordance with the transactions contemplated by the Instruments. Section 2. Authorization of the Official Statement. The form, terms and content of the Preliminary Official Statement are authorized, approved, and confirmed, and the Underwriters’ use of the Preliminary Official Statement and the final Official Statement in connection with the sale of the 2025 Bonds is authorized, approved and confirmed. The Chair, the County Manager, the Finance Officer, and the Clerk (collectively, the “Authorized Officers”), are authorized and directed, individually and collectively, to deliver, on behalf of the County, the Official Statement in substantially such form, with such changes, insertions and omissions as he or she may approve. Section 3. Authorization to Execute the Instruments. The Board authorizes and approves the acquisition and subsequent leaseback of the Mortgaged Property to the Board of Education in accordance with the Lease Agreement and the financing of the 2025 Project in accordance with the terms of the Instruments, which will be valid, legal and binding obligations of the County in accordance with their terms. The form and content of the Instruments are authorized, approved and confirmed, and the Authorized Officers and their respective designees are authorized, empowered and directed, individually and collectively, to execute and deliver the Instruments, including necessary counterparts, in substantially the form and content presented to the Board, but with such changes, modifications, additions or deletions therein as they may deem necessary, desirable or appropriate, their execution thereof to constitute conclusive evidence of the County’s approval of any and all changes, modifications, additions or deletions therein from the form and content of the Instruments presented to the Board. From and after the execution and delivery of the Instruments, the Authorized Officers are authorized, empowered and directed, individually and collectively, to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Instruments as executed. Section 4. County Representative. The Authorized Officers are designated as the County’s representatives to act on behalf of the County in connection with the transactions contemplated by the Instruments and the Preliminary Official Statement, and are authorized to proceed with financing the 2025 Project in accordance with the Instruments and the Preliminary Official Statement and to seek opinions as a matter of law from the County Attorney, which the County Attorney is authorized to furnish on behalf of the County, and opinions of law from such other attorneys for all documents contemplated hereby as required by law. The County Manager and the Chief Financial Officer are authorized, individually and collectively, to select any additional co-managing underwriters for the 2025 Bonds if they determine such selection to be in the best interests of the County. The Authorized Officers and their respective designees are authorized, empowered and directed, individually and collectively, to do any and all other acts and to execute any and all other documents, which they, in their discretion, deem necessary and appropriate to HCBOC 031725 Pg. 91 4 PPAB 11973580V4 consummate the transactions contemplated by the Instruments and the Preliminary Official Statement or as they deem necessary or appropriate to implement and carry out the intent and purposes of this Resolution and to administer the transactions contemplated by this Resolution after the execution and delivery of the 2025 Bonds. Section 5. Severability. If any section, phrase or provision of this Resolution is for any reason declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases or provisions of this Resolution. Section 6. Repealer. All motions, orders, resolutions and parts thereof, in conflict herewith are repealed. Section 7. Effective Date. This Resolution is effective on the date of its adoption. On motion of Commissioner __________, the foregoing resolution entitled “RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, APPROVING AN INSTALLMENT FINANCING CONTRACT AND DELIVERY THEREOF AND PROVIDING FOR CERTAIN OTHER RELATED MATTERS” was duly adopted by the following vote: AYES: NAYS: HCBOC 031725 Pg. 92 PPAB 11973580V4 STATE OF NORTH CAROLINA ) ) SS: COUNTY OF HARNETT ) I, Melissa Capps, Clerk to the Board of Commissioners of the County of Harnett, North Carolina, DO HEREBY CERTIFY that the foregoing is a true and exact copy of a resolution titled “RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE COUNTY OF HARNETT, NORTH CAROLINA, APPROVING AN INSTALLMENT FINANCING CONTRACT AND DELIVERY THEREOF AND PROVIDING FOR CERTAIN OTHER RELATED MATTERS” adopted by the Board of Commissioners of the County of Harnett, North Carolina in regular session convened on the 17th day of March, 2025, as recorded in the minutes of the Board of Commissioners of the County of Harnett, North Carolina. WITNESS, my hand and the seal of the County of Harnett, North Carolina, this the ___ day of March, 2025. (SEAL) Melissa Capps Clerk to the Board of Commissioners County of Harnett, North Carolina HCBOC 031725 Pg. 93 PARKER POE DRAFT 02/13/2025 INSTALLMENT FINANCING CONTRACT between HARNETT COUNTY PUBLIC FACILITIES CORPORATION and COUNTY OF HARNETT, NORTH CAROLINA Dated as of April 1, 2025 HCBOC 031725 Pg. 94 i INSTALLMENT FINANCING CONTRACT TABLE OF CONTENTS Page ARTICLE I DEFINITIONS ...................................................................................................................... 2 ARTICLE II ADVANCE OF PURCHASE PRICE ....................................................................................... 4 ARTICLE III INSTALLMENT PAYMENTS; ADDITIONAL PAYMENTS; SECURITY .................................. 5 Section 3.1 Amounts and Times of Installment Payments and Additional Payments .......................................................................................................... 5 Section 3.2 Place of Payments ................................................................................................. 5 Section 3.3 Late Charges ......................................................................................................... 5 Section 3.4 No Abatement ....................................................................................................... 5 Section 3.5 Prepayment of Purchase Price ............................................................................... 5 ARTICLE IV ACQUISITION AND CONSTRUCTION ................................................................................ 6 Section 4.1 Acquisition and Construction Fund ....................................................................... 6 Section 4.2 Disbursements ...................................................................................................... 6 Section 4.3 Termination .......................................................................................................... 6 Section 4.4 Reliance of Trustee on Documents ........................................................................ 6 Section 4.5 Discretion of the Trustee to File Civil Action in the Event of Dispute............................................................................................................. 6 Section 4.6 Consultation with Counsel .................................................................................... 6 Section 4.7 Compensation of Trustee....................................................................................... 6 Section 4.8 Construction ......................................................................................................... 7 Section 4.9 Right of Entry and Inspection ................................................................................ 7 Section 4.10 Completion of Construction .................................................................................. 7 Section 4.11 Payment and Performance Bonds .......................................................................... 7 Section 4.12 Contractor’s General Liability and Property Damage Insurance ............................. 7 Section 4.13 Contractor’s Builder’s Risk Completed Value Insurance ....................................... 8 Section 4.14 Contractor’s Worker’s Compensation Insurance .................................................... 8 Section 4.15 Filing With the Trustee ......................................................................................... 8 ARTICLE V RESPONSIBILITIES OF THE COUNTY ................................................................................ 9 Section 5.1 Care and Use......................................................................................................... 9 Section 5.2 Inspection ............................................................................................................. 9 Section 5.3 Utilities ................................................................................................................. 9 Section 5.4 Taxes .................................................................................................................... 9 Section 5.5 Title Insurance ...................................................................................................... 9 Section 5.6 Risk of Loss ........................................................................................................ 10 Section 5.7 Performance by the Trustee of the County’s Responsibilities ............................... 10 Section 5.8 Financial Statements ........................................................................................... 10 Section 5.9 Property Insurance .............................................................................................. 10 ARTICLE VI TITLE; LIENS ................................................................................................................ 12 Section 6.1 Title .................................................................................................................... 12 Section 6.2 Liens ................................................................................................................... 12 HCBOC 031725 Pg. 95 Page ii ARTICLE VII DAMAGE, DESTRUCTION AND LOSS OR THEFT OF MORTGAGED PROPERTY; NET PROCEEDS .......................................................................................................... 13 Section 7.1 Damage, Destruction or Condemnation ............................................................... 13 Section 7.2 Obligation of the County to Repair and Replace the Mortgaged Property ......................................................................................................... 13 Section 7.3 Discharge of the Obligation of the County to Repair the Mortgaged Property ......................................................................................................... 13 Section 7.4 Cooperation of the Corporation ........................................................................... 14 ARTICLE VIII REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COUNTY AND THE CORPORATION ................................................................................................................ 15 Section 8.1 Representations, Warranties and Covenants of the County................................... 15 Section 8.2 Warranties and Representations of the Corporation ............................................. 19 ARTICLE IX TAX COVENANTS AND REPRESENTATIONS ................................................................... 20 ARTICLE X INDEMNIFICATION.......................................................................................................... 21 ARTICLE XI DISCLAIMER OF WARRANTIES ..................................................................................... 22 ARTICLE XII DEFAULT AND REMEDIES ............................................................................................ 23 Section 12.1 Definition of Event of Default ............................................................................. 23 Section 12.2 Remedies on Default ........................................................................................... 23 Section 12.3 Further Remedies ................................................................................................ 24 ARTICLE XIII ASSIGNMENT .............................................................................................................. 25 Section 13.1 Assignment by the County .................................................................................. 25 Section 13.2 Assignment by the Corporation ........................................................................... 25 ARTICLE XIV LIMITED OBLIGATION OF THE COUNTY .................................................................... 26 ARTICLE XV JOINDER BY THE TRUSTEE .......................................................................................... 27 ARTICLE XVI MISCELLANEOUS ....................................................................................................... 28 Section 16.1 Waiver ................................................................................................................ 28 Section 16.2 County’s Acceptance of Rights and Responsibilities Under the Indenture ........................................................................................................ 28 Section 16.3 Severability ......................................................................................................... 28 Section 16.4 Governing Law ................................................................................................... 28 Section 16.5 Notices ............................................................................................................... 28 Section 16.6 Section Headings ................................................................................................ 29 Section 16.7 Entire Contract .................................................................................................... 29 Section 16.8 Binding Effect..................................................................................................... 29 Section 16.9 Time ................................................................................................................... 29 Section 16.10 Payments ............................................................................................................ 29 Section 16.11 Covenants of County, Corporation or LGC not Covenants of Officials Individually ..................................................................................... 30 Section 16.12 Amounts Remaining in Funds ............................................................................. 30 Section 16.13 Amendments to this Contract .............................................................................. 30 Section 16.14 Execution in Counterparts; Electronic Signature .................................................. 30 INSTALLMENT PAYMENT SCHEDULE - 2025 BONDS .......................................................... PS-1 EXHIBIT A FORM OF REQUISITION ............................................................................................. A-1 HCBOC 031725 Pg. 96 INSTALLMENT FINANCING CONTRACT THIS INSTALLMENT FINANCING CONTRACT, dated as of April 1, 2025 (this “Contract”), is between the HARNETT COUNTY PUBLIC FACILITIES CORPORATION (the “Corporation”), a nonprofit corporation duly created, existing and in good standing under the laws of the State of North Carolina (the “State”), and the COUNTY OF HARNETT, NORTH CAROLINA (the “County”), a political subdivision validly existing under the Constitution, statutes and laws of the State. W I T N E S S E T H: WHEREAS, the County is a validly existing political subdivision, organized under and by virtue of the Constitution and laws of the State; WHEREAS, the County has the power, pursuant to Section 160A-20 of the General Statutes of North Carolina, to (1) enter into installment contracts in order to purchase, or finance or refinance the purchase of real or personal property and to finance or refinance the construction or repair of fixtures or improvements on real property and (2) create a security interest in some or all of the property financed or refinanced to secure repayment of the purchase price; WHEREAS, the Board of Commissioners of the County (the “Board”) has previously determined, and further determines that it is in the best interest of the County to (1) finance the construction, equipping, and furnishing of school facilities in the County, including, but not limited to, Flatwoods Middle School (the “2025 Project”), and (2) pay the costs related to the execution and delivery of the Contract; WHEREAS, to obtain funds to finance the 2025 Project, the County has entered into this Contract with the Corporation under which it will make Installment Payments and Additional Payments (as such terms are defined below) in consideration thereof; WHEREAS, there will be executed and delivered pursuant to an Indenture of Trust dated as of April 1, 2025 (the “Indenture”) between the Corporation and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), Limited Obligation Bonds (County of Harnett, North Carolina), Series 2025 (the “2025 Bonds”), evidencing proportionate undivided interests in rights to receive certain Revenues (as defined below) under this Contract; WHEREAS, pursuant to the Indenture, the Corporation has assigned the Trust Estate (as defined in the Indenture) to the Trustee; WHEREAS, the 2025 Bonds evidence proportionate undivided interests in the rights to receive certain Revenues and shall be payable solely from the sources provided in the Indenture; WHEREAS, the execution, performance and delivery of this Contract have been authorized, approved and directed by the Board by a resolution passed and adopted by the Board on March 17, 2025; WHEREAS, the execution, delivery and performance of this Contract by the Corporation, and the assignment by the Corporation to the Trustee, pursuant to the Indenture, of the Trust Estate, have been authorized, approved and directed by all necessary and appropriate action of the Corporation; WHEREAS, the obligation of the County to make Installment Payments and Additional Payments shall not constitute a general obligation or other indebtedness of the County within the meaning of the HCBOC 031725 Pg. 97 2 Constitution of the State; and shall not constitute a direct or indirect pledge of the faith and credit or taxing power of the County within the meaning of the Constitution of the State; WHEREAS, to secure further the obligation of the County hereunder, the County has entered into a Deed of Trust, Security Agreement and Fixture Filing dated as of April 1, 2025 (the “Deed of Trust”) with the deed of trust trustee named therein for the benefit of the Corporation and its assignee; and WHEREAS, no deficiency judgment may be rendered against the County in any action for breach of a contractual obligation under this Contract, and the taxing power of the County is not and may not be pledged in any way directly or indirectly or contingently to secure any money due under this Contract; NOW, THEREFORE, for and in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS All words and phrases defined in Article I of the Indenture have the same meaning in this Contract. In addition, the following terms have the meanings specified below unless the context clearly requires otherwise: “Additional Payments” means the reasonable and customary expenses and fees (including, but not limited to, attorneys’ fees, costs and expenses) of the Trustee and the Corporation, any expenses of the Corporation in defending an action or proceeding in connection with this Contract or the Indenture and any taxes or any other expenses, including, but not limited to, licenses, permits, state and local income, sales and use or ownership taxes or property taxes which the County or the Corporation is expressly required to pay as a result of this Contract (together with interest that may accrue thereon if the County fails to pay the same). “Board” means the Board of Commissioners of the County. “Code” means the Internal Revenue Code of 1986, as amended, and the rulings and regulations (including temporary and proposed regulations) promulgated thereunder, or any successor statute thereto. “Corporation” means the Harnett County Public Facilities Corporation or any successor thereto. “County” means the County of Harnett, North Carolina or any successor to its functions. “County Representative” means (1) the County Manager, the Chair of the Board, the Finance Officer, or the person or persons at the time designated to act on behalf of the County for the purpose of performing any act under this Contract by a written certificate furnished to the Trustee and the Corporation containing the specimen signatures of such person or persons and signed on behalf of the County by the County Manager, the Chair of the Board, or the Finance Officer, or (2) if any or all of the County’s rights and obligations are assigned hereunder, the person or persons at the time designated to act on behalf of the County and the assignee by a written certificate similarly furnished and of the same tenor. “Deed of Trust” means the Deed of Trust, Security Agreement and Fixture Filing dated as of April 1, 2025 from the County to the deed of trust trustee named therein for the benefit of the Corporation or its assignees, as the same may be modified or extended in accordance with its terms. All of the terms, definitions, conditions and covenants of the Deed of Trust are incorporated herein by reference and are made a part of this Contract as if fully set forth herein. HCBOC 031725 Pg. 98 3 “Fiscal Year” means a twelve-month period commencing on the first day of July of any year and ending on the 30th day of June of the succeeding year, or such other twelve-month period which may subsequently be adopted as the Fiscal Year of the County. “Indenture” means the Indenture of Trust dated as of April 1, 2025 between the Corporation and the Trustee, as amended or supplemented from time to time, pursuant to which the Bonds are executed and delivered. “Installment Payments” means those payments made by the County to the Corporation as described in Article III and in the Payment Schedule attached hereto. [“Lease Agreement” means the Lease Agreement, dated as of April 1, 2025, between the Harnett County Board of Education and the County, as amended or supplemented from time to time.] “LGC” means the Local Government Commission of North Carolina. “Mortgaged Property” means the property subject to the lien and security interest created by the Deed of Trust, as more particularly described therein. “Net Proceeds” means, when used with respect to any (1) proceeds from policies of insurance which are payable to the Corporation or the Trustee with respect to the Mortgaged Property, (2) proceeds from any payment and performance bond maintained pursuant to Section 4.11 herein, (3) proceeds of any condemnation award arising out of the condemnation of all or any portion of the Mortgaged Property or (4) proceeds from any sale or lease of the Mortgaged Property pursuant to the Deed of Trust or otherwise subsequent to an Event of Default, the amount remaining after deducting from the gross proceeds thereof all expenses (including, without limitation, attorneys’ fees, costs and expenses) incurred in the collection of such proceeds. “Payment Schedule” means the document attached hereto and incorporated herein by reference, which sets forth the County’s Installment Payments. “Projects” means, initially, the 2025 Project, as the term “Projects” may be amended in connection with any other project financed or refinanced with the proceeds of Additional Bonds executed and delivered under Section 2.11 of the Indenture. “Purchase Price” means the amount of $[AMOUNT] advanced by the Corporation to enable the County to finance and refinance the Projects, as such price may be adjusted in connection with the execution and delivery of Additional Bonds under Section 2.11 of the Indenture. “Revenues” means (a) all Net Proceeds not applied to the replacement of the Mortgaged Property; (b) all Installment Payments; and (c) all investment income on all funds and accounts created under the Indenture (other than the Rebate Fund). “State” means the State of North Carolina. “2025 Project” means the construction, equipping, and furnishing of school facilities in the County, including, but not limited to, Flatwoods Middle School. [END OF ARTICLE I] HCBOC 031725 Pg. 99 4 ARTICLE II ADVANCE OF PURCHASE PRICE The Corporation hereby makes an advance to the County of the Purchase Price, and the County hereby accepts from the Corporation the Purchase Price to be applied in accordance with the terms and conditions of this Contract. The County will use the proceeds of the Purchase Price to finance the Projects and to pay certain costs incurred in connection with the execution and delivery of the Bonds. [END OF ARTICLE II] HCBOC 031725 Pg. 100 5 ARTICLE III INSTALLMENT PAYMENTS; ADDITIONAL PAYMENTS; SECURITY Section 3.1 Amounts and Times of Installment Payments and Additional Payments. As consideration for the Corporation’s advance of the Purchase Price to the County, the County shall repay to the Trustee, as assignee of the Corporation under the Indenture, the Purchase Price in installments with interest as provided in this Contract and the Payment Schedule attached hereto (each an “Installment Payment”). Each installment shall be deemed to be an Installment Payment and shall be paid in the amounts and at the times set forth on the Payment Schedule except as provided herein. There shall be credited against the amount of Installment Payments otherwise payable hereunder amounts equal to (1) earnings derived from the investment of the Bond Fund and the Prepayment Fund and (2) any other money not constituting Installment Payments required to be deposited in the Bond Fund. Installment Payments shall be sufficient in the aggregate to repay the Purchase Price together with interest thereon. As further consideration for the Corporation’s advance of the Purchase Price to the County, the County shall also pay the Additional Payments, as required herein, on a timely basis directly to the person or entity to which such Additional Payments are owed. Section 3.2 Place of Payments. The County shall make all payments required to be made to the Corporation hereunder to the Trustee at its designated office in immediately available funds or as may be otherwise directed in writing by the Trustee. Section 3.3 Late Charges. To the extent permitted by law, if the County fails to pay any Installment Payment or any other sum required to be paid to the Trustee following the due date thereof, the County shall pay a late payment charge equal to the amount of the delinquency times a per diem rate calculated at the rate(s) borne by each respective Bond. Section 3.4 No Abatement. Subject to Article XIV, there will be no abatement or reduction of the Installment Payments or Additional Payments by the County for any reason, including but not limited to, any failure by the County to appropriate funds to the payment of said Installment Payments or Additional Payments, any defense, recoupment, setoff, counterclaims or any claim (real or imaginary) arising out of or related to the Projects. The County assumes and shall bear the entire risk of loss and damage to the Projects from any cause whatsoever, it being the intention of the parties that the Installment Payments shall be made in all events unless the obligation to make such Installment Payments is terminated as otherwise provided herein. Section 3.5 Prepayment of Purchase Price. If the County has performed all of its obligations under this Contract, then it shall have the option to prepay the Purchase Price related to the 2025 Bonds on or after the date or dates permitted for the prepayment of the 2025 Bonds as set forth in Section 4.1 of the Indenture or to provide for prepayment of such Purchase Price, in full or in part, in the amount of $5,000 or any integral multiple thereof, at a prepayment price equal to the then applicable prepayment price of the 2025 Bonds, including any required prepayment premium under Section 4.1 of the Indenture, plus accrued interest to the prepayment date. If the Purchase Price is partially prepaid, then the Trustee shall recalculate the Payment Schedule as necessary in the manner required by Section 3.7 of the Indenture. [END OF ARTICLE III] HCBOC 031725 Pg. 101 6 ARTICLE IV ACQUISITION AND CONSTRUCTION Section 4.1 Acquisition and Construction Fund. The Corporation has caused the amount set forth in Section 3.1 of the Indenture to be deposited in the Acquisition and Construction Fund. Section 4.2 Disbursements. The Trustee shall disburse money held to the credit of the Acquisition and Construction Fund in payment of the Cost of Acquisition and Construction on receipt of written requisition from the County Representative substantially in the form set forth in Exhibit A, attached hereto. The Trustee may, but shall not be required to, request such other documents or other items as the Trustee may reasonably determine to be necessary, including but not limited to, construction invoices, lien waivers, inspection reports, itemization of present and prospective expenditures and a list of items necessary for completion, or as otherwise set forth in the Indenture. The Trustee shall be fully protected in disbursing amounts in accordance with any written requisition of the County Representative and the Trustee has no duty or obligation to verify the statements made therein or to inquire into the purposes for which the requested withdrawals are being made. Section 4.3 Termination. The Trustee shall terminate the Acquisition and Construction Fund, or any account therein, at the earlier of (a) the final distribution of money held in the Acquisition and Construction Fund, or any account therein, or (b) the termination of this Contract. The Trustee shall terminate any account within the Acquisition and Construction Fund upon final distribution of money held in such account. Section 4.4 Reliance of Trustee on Documents. The Trustee may act in conclusive reliance on any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument. The Trustee is not liable in any manner for the sufficiency or correctness as to form, manner and execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder are limited to the receipt of such money, instruments or other documents received by it as the Trustee, and for the disposition of the same in accordance herewith. Section 4.5 Discretion of the Trustee to File Civil Action in the Event of Dispute. If the County and the Trustee disagree about the interpretation of this Contract, or about the rights and obligations, or the propriety of any action contemplated by the Trustee hereunder, the Trustee may, but is not required to, file an appropriate civil action in the State to resolve the disagreement. The Trustee will be indemnified, to the extent permitted by applicable law and subject to Article XIV, for all costs, including reasonable attorneys’ fees, costs and expenses, in connection with such civil action and shall be fully protected in suspending all or part of its activities under this Contract until a final judgment in such action is received. Section 4.6 Consultation with Counsel. The Trustee may consult with qualified counsel of its own choice and has full and complete authorization and protection to rely on the opinion of such counsel. The Trustee is otherwise not liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its negligence or misconduct. Section 4.7 Compensation of Trustee. The County shall pay to the Trustee reasonable compensation for all services performed by the Trustee hereunder and under the Indenture and also for all reasonable expenses, charges and other disbursements and those of the Trustee’s attorneys, agents and employees incurred in and about the administration and execution of the Indenture and the performance of the Trustee’s powers and duties hereunder and under the Indenture, as an Additional Payment. HCBOC 031725 Pg. 102 7 Section 4.8 Construction. The County shall comply with the provisions of Article 8 of Chapter 143 of the General Statutes of North Carolina in constructing the Projects. The County shall cause the Projects to be carried on expeditiously in accordance with the plans and specifications therefor, all applicable ordinances and statutes, and in accordance with the requirements of all regularly constituted authorities having jurisdiction over same. The County shall ensure that (a) the Projects do not encroach on nor overhang any easement or right of way and (b) the portions of the Projects, when erected, will be wholly within the sites of the Projects and building restriction lines, however established, and will not violate applicable use or other restrictions contained in prior conveyances or applicable protective covenants or restrictions. The County shall cause all utility lines, septic systems and streets serving the Projects to be completed in accordance with health department standards and other applicable regulations of any governmental agency having jurisdiction. The County will promptly correct or cause to be corrected any structural defect in the improvements or any departure from the plans and specifications. Section 4.9 Right of Entry and Inspection. The Corporation, the Trustee and their representatives and agents have the right to enter on the property on which the Projects are located and inspect the Projects from time to time, during and after acquisition, construction equipping, and expansion, and the County shall cause the construction manager at risk or any first-tier subcontractor, as applicable, to cooperate with the Corporation, the Trustee and their representatives and agents during such inspections. No right of inspection or approval contained herein imposes on the Corporation or the Trustee any duty or obligation whatsoever to undertake any inspection or to give any approval. Section 4.10 Completion of Construction. The County shall proceed with reasonable diligence to complete the Projects in a timely manner. On completion of the acquisition, construction, renovation and equipping, as applicable, of the Projects, a County Representative shall deliver to the Trustee a certificate of a County Representative stating the fact and date of such completion and stating that all of the Cost of Acquisition and Construction has been determined and paid (or that all of such Cost of Acquisition and Construction has been paid less specified claims which are subject to dispute and for which a retention in the Acquisition and Construction Fund is to be maintained in the full amount of such claims until such dispute is resolved). If, on the basis of such certificate, the accounting of the Acquisition and Construction Fund by the Trustee shows that money in the Acquisition and Construction Fund, or any account or subaccount thereof, will remain unexpended for the Cost of Acquisition and Construction, then the balance shall be applied in accordance with Section 3.11 of the Indenture. Section 4.11 Payment and Performance Bonds. Any contractor or construction manager at risk, as applicable, with a contract more than fifty thousand dollars ($50,000) shall furnish to the County a performance bond and a separate labor and material payment bond as required by North Carolina General Statutes, Article 3, Chapter 44A-26 or any successor statute. Upon request, copies of such bonds shall be provided to the Trustee. To the extent permitted by law, in lieu of furnishing a performance bond and a separate labor and material payment bond, any contractor or construction manager at risk, as applicable, may furnish the County with collateral in an amount of its construction contract. The Trustee has no duty or obligation to determine the sufficiency of any such insurance or collateral or examine any payment and performance bond hereunder. Section 4.12 Contractor’s General Liability and Property Damage Insurance. To the extent commercially reasonable, each contractor, or the construction manager at risk or any first-tier subcontractor, as applicable, entering into a construction contract with the construction manager at risk, entering into a construction contract related to the Projects is required by the County to procure and maintain standard form (a) commercial general liability and property damage insurance, at its own cost and expense, during the duration of such contractor’s construction contract, in the amount of at least $1,000,000 bodily injury and $1,000,000 property damage liability each occurrence, and (b) comprehensive automobile liability insurance on owned, hired and non-owned vehicles for limits not less than $1,000,000 each accident bodily HCBOC 031725 Pg. 103 8 injury and property damage liability. Such policies must include the County as additional named insureds, and, to the extent commercially reasonable, shall include a provision prohibiting cancellation or termination without 30 days’ prior notice by certified mail to the County. A certificate evidencing such coverage shall be provided to the County or, if such insurance is provided by a private carrier, a completed certificate of insurance, in form acceptable to the County, shall be provided to the County with respect to each contractor entering into a construction contract or, in the case of a construction manager at risk, the construction manager at risk or any first-tier subcontractor entering into a construction contract with the construction manager at risk. The Trustee has no duty or obligation to monitor ongoing compliance with the requirements of this Section 4.12. Section 4.13 Contractor’s Builder’s Risk Completed Value Insurance. To the extent commercially reasonable, the County will procure and maintain, or will require each contractor, or the construction manager at risk or any first-tier subcontractor, as applicable, entering into a construction contract with the construction manager at risk, entering into a construction contract related to the Projects to procure and maintain property insurance (builder’s risk) on all acquisition, construction, equipping and expansion related to the Projects (excluding contractor’s tools and equipment) at the Projects at the full and insurable value thereof. This insurance will include the interest of the County and the contractor as additional insureds; and shall insure against “all risk” subject to standard policy conditions and exclusions. Each contractor, or the construction manager at risk or any first-tier subcontractor entering into a construction contract with the construction manager at risk, shall purchase and maintain similar property insurance for portions of the work stored off the sites on which the Projects are located or in transit when such portions of the work are to be included in an application for payment. Each contractor, or the construction manager at risk or any first-tier subcontractor entering into a construction contract with the construction manager at risk, is responsible for the payment of any deductible amounts associated with this insurance. The Trustee has no duty or obligation to monitor ongoing compliance with the requirements of this Section 4.13. Section 4.14 Contractor’s Worker’s Compensation Insurance. Each contractor, or the construction manager at risk or any first-tier subcontractor, as applicable, entering into a construction contract with the construction manager at risk, entering into a construction contract related to the Projects is required to procure and maintain, at its own cost and expense, worker’s compensation insurance during the term of its construction contract, covering its employees working thereunder. Employer’s liability limits shall be obtained for at least $1,000,000. Such insurance, if issued by a private carrier, must contain a provision prohibiting cancellation or termination without 30 days’ prior notice by certified mail to the County to the extent commercially reasonable. A certificate evidencing such coverage shall be provided to the County or, if such insurance is provided by a private carrier, then a completed certificate of insurance, in form acceptable to the County, shall be provided to the County with respect to each contractor entering into a construction contract or, in the case of a construction manager at risk, to the construction manager at risk or any first-tier subcontractor entering into a construction contract with the construction manager at risk. The Trustee has no duty or obligation to monitor ongoing compliance with the requirements of this Section 4.14. Section 4.15 Filing With the Trustee. The County shall provide on request of the Trustee, a certificate of a County Representative certifying compliance with Section 4.11, Section 4.12, Section 4.13 and Section 4.14. In addition to this certificate, the Trustee may request at any time copies of all performance bonds and insurance contracts or approved bonds thereof, as required under Section 4.11, Section 4.12, Section 4.13 and Section 4.14, to be delivered to the Trustee in a timely manner and in such form as to certify compliance with the provisions of the Sections referred to above. [END OF ARTICLE IV] HCBOC 031725 Pg. 104 9 ARTICLE V RESPONSIBILITIES OF THE COUNTY Section 5.1 Care and Use. Subject to the provisions of applicable law and Article XIV, the County shall use the Mortgaged Property in a careful and proper manner, in compliance with all applicable laws and regulations, and, at its sole cost and expense, shall service, repair and maintain the Mortgaged Property so as to keep the Mortgaged Property in good condition, repair, appearance and working order for the purposes intended, ordinary wear and tear excepted. The County shall replace any part of the Mortgaged Property as may from time to time become worn out, unfit for use, lost, stolen, destroyed or damaged, if necessary to the proper operation of the Mortgaged Property. Any and all additions to or replacements of the Mortgaged Property and all parts thereof shall constitute accessions to the Mortgaged Property and shall be subject to all the terms and conditions of this Contract and included in the term “Mortgaged Property” and as used in this Contract. Section 5.2 Inspection. The Trustee, or its agent or representative, has the right on reasonable prior notice to the County, and subject to the reasonable direction and supervision of the County, to enter into and inspect the Mortgaged Property and observe their use during normal business hours. No right of inspection imposes on the Trustee any duty or obligation whatsoever to undertake any inspection. Section 5.3 Utilities. The County shall pay all charges for gas, water, steam, electricity, light, heat or power, telephone or other utility services furnished to or used on or in connection with the Mortgaged Property. There shall be no abatement of the Installment Payments on account of interruption of any such services. Section 5.4 Taxes. (a) The County shall pay when due any and all taxes relating to the Mortgaged Property and the County’s obligations hereunder including, but not limited to, all license or registration fees, gross receipts tax, sales and use tax, if applicable, license fees, documentary stamp taxes, rental taxes, assessments, charges, ad valorem taxes, excise taxes, and all other taxes, licenses and utility charges of any type imposed on the ownership, possession or use of the Mortgaged Property by any governmental body or agency, together with any interest and penalties, other than taxes on or measured by the net income of the Corporation; provided, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the County is obligated to pay only such installments as are required to be paid as and when the same become due. (b) The County may, at its expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom; provided that before such nonpayment it furnishes the Trustee with an Opinion of Counsel to the effect that, by nonpayment of any such items, the security interest held by the Trustee in the Mortgaged Property will not be materially endangered and the Mortgaged Property will not be subject to loss or forfeiture. Otherwise, the County shall promptly pay such taxes, assessments or charges or make provisions for the payment thereof. Section 5.5 Title Insurance. The County agrees to obtain, at its own cost and expense, a policy of title insurance, in form satisfactory to the Corporation, in conjunction with the execution and delivery of this Contract, payable to the Trustee, as its interest may appear, insuring fee title of the County to the Mortgaged Property. The amount of such policy need not exceed the insurable value of the Mortgaged Property as reasonably determined by the County. HCBOC 031725 Pg. 105 10 Section 5.6 Risk of Loss. The County shall bear all risk (1) of loss or damage to the Mortgaged Property and (2) of the condemnation of any of the Mortgaged Property or any portion thereof. Section 5.7 Performance by the Trustee of the County’s Responsibilities. Any performance required of the County or any payments required to be made by the County may, but are not required to, if not timely performed or paid, be performed or paid by the Trustee, and, in that event, the Trustee shall be immediately reimbursed by the County for these payments or other performance by the Trustee, with interest thereon at a rate equal to the lesser of (i) the prime rate of the Trustee (or the Trustee’s affiliated bank) or (ii) the highest amount then allowed by law, at the time the payment is made and as adjusted from time to time thereafter until so reimbursed. Section 5.8 Financial Statements. If such information is not otherwise publicly available, the County agrees that it will furnish to the Trustee at such reasonable times as the Trustee may request, current financial statements (including, without limitation, the County’s annual budget as submitted or approved) and further agrees that it will permit the Trustee or its respective agent and representative to inspect the County’s books and records and make extracts therefrom. The County represents and warrants to the Trustee that (1) all financial statements which have been or may be delivered or otherwise made available to the Trustee do and will fairly and accurately reflect the County’s financial condition and (2) there has been no material adverse change, as of the date of execution of this Contract, in the County’s financial condition from the condition as reflected in the audited financial statements for the most recent Fiscal Year for which audited financial statements are available. The Trustee shall have no duty to review or analyze any such financial statements it requests to be provided to it and shall hold such financial statements solely as a repository for the benefit of the bondholders. The Trustee shall not be deemed to have notice, whether or not such financial statements are publicly available, of any information contained therein or event of default which may be disclosed in any manner therein. The County further agrees that it will furnish a copy of its most recent audited financial statements to any Owner of the Bonds on written request therefor. Section 5.9 Property Insurance. The County shall continually maintain or cause to be maintained insurance to the full insurable value of the Mortgaged Property against, to the extent commercially available at a reasonable cost, loss by fire, wind damage, hazards customarily included in the term “extended coverage” with responsible and reputable insurance companies and shall promptly pay all premiums therefor when due. All insurance policies and renewals thereof shall name the Corporation and the Trustee as parties insured thereunder, as the respective interests of each of such parties may appear, and have attached thereto a mortgagee long form loss payable clause in favor of the Trustee, and provide that no such policy can lapse or be canceled, substantially modified or terminated without at least 30 days prior notice to the Trustee and that any loss payable thereunder shall be made payable and shall be applied as provided in Article VII. In the event of loss, the County shall give immediate written notice by mail to the Trustee, who may, but shall not be obligated to, make proof of loss. In the event of a foreclosure of the Deed of Trust or other transfer of title to the Mortgaged Property, all right, title and interest of the County in any insurance policies then in force shall pass to the Trustee. Additionally, during the term of this Contract, the County shall continually maintain standard liability insurance as is customarily maintained by like entities with respect to facilities similar to the Mortgaged Property. The County may provide for and maintain the insurance required under this Contract partially or wholly by means of an adequate risk retention fund. Reserves for a risk retention fund shall be determined by using actuarial principles. Any risk retention fund shall be reviewed annually by the County’s risk manager or an independent insurance consultant or actuarial consultant. The Trustee shall conclusively rely on a letter of the County’s risk manager or an independent insurance consultant or actuarial consultant as HCBOC 031725 Pg. 106 11 to the adequacy of any risk retention fund. The Trustee has made no evaluation as to the sufficiency of the insurance requirements set forth herein. [END OF ARTICLE V] HCBOC 031725 Pg. 107 12 ARTICLE VI TITLE; LIENS Section 6.1 Title. Title to the Mortgaged Property and any and all additions, repairs, replacements or modifications thereto shall be in the County from and after the date of execution and delivery of this Contract. The County shall own the Mortgaged Property free and clear of any lien or security interest created by this Contract and the Deed of Trust, as applicable, on the repayment in full of the Purchase Price and the payment of all other amounts due hereunder. The County shall deliver to the Trustee the Deed of Trust simultaneously with the execution and delivery of this Contract and shall cause the Deed of Trust to be recorded in the Harnett County Register of Deeds. On payment in full of all of the County’s obligations hereunder, including the Purchase Price and all other payments due hereunder, the Corporation or its assignee, at the County’s expense and request, shall discharge the Indenture and release the lien on the Mortgaged Property, at which time this Contract will terminate. Section 6.2 Liens. The County shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, security interest, encumbrance or claim on or with respect to Mortgaged Property or any interest therein, except for (1) the lien and security interest of the Corporation and the Trustee in the Deed of Trust and as otherwise permitted therein; (2) utility, access and other easements and rights of way, restrictions and exceptions which do not interfere with or impair the intended use of the Mortgaged Property; (3) the Lease Agreement and any other lease permitted by Section 13.1 of this Contract; and (4) such minor defects, irregularities, encumbrances and clouds on title as normally exist with respect to property of the general character of the Mortgaged Property and as do not materially impair title to the Mortgaged Property. The County shall promptly, at its own expense, take such action as may be necessary duly to discharge any such mortgage, pledge, lien, security interest, charge, encumbrance or claim if the same shall arise at any time. The County shall reimburse the Corporation for any expense incurred by it to discharge or remove any such mortgage, pledge, lien, security interest, charge, encumbrance or claim. [END OF ARTICLE VI] HCBOC 031725 Pg. 108 13 ARTICLE VII DAMAGE, DESTRUCTION AND LOSS OR THEFT OF MORTGAGED PROPERTY; NET PROCEEDS Section 7.1 Damage, Destruction or Condemnation. If, during the term hereof, (1) any portion of the Mortgaged Property is destroyed or damaged by fire or other casualty; (2) title to or the temporary or permanent use of any portion of the Mortgaged Property or the estate of the County or the Corporation or its assignee in any portion of the Mortgaged Property is taken under the power of eminent domain by any governmental authority; (3) a material defect in construction of any portion of the Mortgaged Property becomes apparent; or (4) title to or the use of any portion of the Mortgaged Property is lost by reason of a defect in title thereto, then the County continues to be obligated, subject to the provisions of Section 7.2, to pay the amounts specified in Section 3.1 at the respective times required and written notice of any of the foregoing shall promptly be given to the Trustee. Section 7.2 Obligation of the County to Repair and Replace the Mortgaged Property. Subject to the provisions of Section 7.3, the County shall direct the Trustee in writing to cause the Net Proceeds of any insurance policies, performance or payment bonds, if any, condemnation awards or Net Proceeds made available by reason of any occurrence described in Section 7.1, to be deposited in a separate fund held by the Trustee. Except as set forth in Section 7.3, all Net Proceeds so deposited shall be applied to the prompt repair, restoration, modification, improvement or replacement of the Mortgaged Property on receipt of requisitions approved by a County Representative stating with respect to each payment to be made: (a) the requisition number; (b) the name and address of the person, firm or corporation to whom payment is due; (c) the amount to be paid; and (d) that each obligation mentioned therein has been properly incurred, is a proper charge against the Acquisition and Construction Fund or such separate fund, and has not been the basis of any previous withdrawal and specifying in reasonable detail the nature of the obligation, accompanied by a bill or a statement of account for such obligation. The Trustee shall cooperate with the County in the administration of such separate fund and shall not unreasonably withhold its approval of requisitions under this Section 7.2. The Trustee shall be fully protected in releasing amounts approved by the County Representative and the Trustee has no duty or obligation to determine whether or not any such requisitioned amounts are appropriate. If the Net Proceeds (plus any amount withheld therefrom by reason of any deductible clause) are insufficient to pay in full the cost of any repair, restoration, modification, improvement or replacement of the Mortgaged Property, the County may complete the work and pay any cost in excess of the amount of the Net Proceeds, and the County agrees that, if by reason of any such insufficiency of the Net Proceeds, the County shall make any payments pursuant to the provisions of this Section 7.2, the County is not entitled to any reimbursement therefor from the Corporation, the Trustee or the Owners nor is the County entitled to any diminution of the amounts payable under Section 3.1. Any repair, restoration, modification, improvement or replacement paid for in whole or in part out of such Net Proceeds shall be the property of the County, subject to the Deed of Trust to the extent it relates to the Mortgaged Property, and shall be included as part of the Mortgaged Property under this Contract. Section 7.3 Discharge of the Obligation of the County to Repair the Mortgaged Property. On the occurrence of an event described in Section 7.1 with respect to the Mortgaged Property, the County may elect not to repair, restore, improve or replace the affected portion of the Mortgaged Property if (1) (a) the Net Proceeds are less than $1,000,000 and (b) a County Representative certifies to the Corporation that such Net Proceeds are not necessary to restore the affected portion of the Mortgaged Property to its intended use or (2) the County uses the Net Proceeds, together with any other available funds of the County that may be necessary, to redeem or defease all of the Outstanding Bonds in accordance with the terms of the Indenture. In such event, the County shall direct the Trustee in writing to either deposit such Net Proceeds in the Bond Fund to be applied toward the next payment of principal and interest with respect to the Bonds or in the Prepayment Fund or an escrow fund to effect the prepayment or defeasance of the Outstanding Bonds, as the case may be. HCBOC 031725 Pg. 109 14 Within 90 days of the occurrence of an event specified in Section 7.1, the County shall commence the repair, restoration, modification, improvement or replacement of the Mortgaged Property, or shall elect, by written notice to the Trustee, to proceed under the provisions of the immediately preceding paragraph. For purposes of this Section, “commence” shall include the retention of an architect or engineer in anticipation of repair, restoration, modification, improvement or replacement of the Mortgaged Property. Section 7.4 Cooperation of the Corporation. The Corporation shall cooperate fully with the County and the Trustee in filing any proof of loss with respect to any insurance policy covering the events described in Section 7.1, and hereby assigns to the Trustee any interest it may have in such policies or rights of action for such purposes. In no event shall the Corporation or the County voluntarily settle, or consent to the settlement of, any proceeding arising out of any such insurance claim with respect to the Mortgaged Property without the written consent of the other. [END OF ARTICLE VII] HCBOC 031725 Pg. 110 15 ARTICLE VIII REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COUNTY AND THE CORPORATION Section 8.1 Representations, Warranties and Covenants of the County. The County warrants and represents to the Corporation and to the Trustee for the benefit of the Owners (all such representations and warranties being continuing) that: (a) The County is a duly organized and validly existing political subdivision of the State and has all powers necessary to enter into the transactions contemplated by this Contract and the Deed of Trust and to carry out its obligations hereunder; (b) The County agrees that during the term of this Contract it will take no action that would adversely affect its existence as a political subdivision in good standing in the State, cause the County to be consolidated with or merge into another political subdivision of the State or permit one or more other political subdivisions of the State to consolidate with or merge into it, unless the political subdivision of the State created thereby expressly assumes in writing the County’s obligations hereunder; (c) This Contract, the Deed of Trust and all other documents relating hereto and the performance of the County’s obligations hereunder and thereunder have been or will be duly and validly authorized, executed and delivered by the County and approved under all laws, regulations and procedures applicable to the County and, assuming due authorization, execution and delivery thereof by the other parties thereto, constitute valid, legal and binding obligations of the County, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights generally and such principles of equity as a court having jurisdiction may impose; (d) No approval or consent is required from any governmental authority with respect to the entering into or performance by the County of this Contract, the Deed of Trust and all other documents related thereto and the transactions contemplated hereby and thereby or if such approvals are required, they will be duly obtained; (e) Except as disclosed by the County in writing to the Corporation and the Trustee, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or, to the best of the County’s knowledge, threatened, against or affecting the County challenging the validity or enforceability of this Contract, the Deed of Trust or any other documents relating hereto and the performance of the County’s obligations hereunder and thereunder, and compliance with the provisions hereof or thereof, under the circumstances contemplated hereby or thereby, does not and will not in any material respect conflict with, constitute on the part of the County a breach of or default under, or result in the creation of a lien or other encumbrance on any property of the County (except as contemplated herein or therein) pursuant to any agreement or other instrument to which the County is a party, or any existing law, regulation, court order or consent decree to which the County is subject; (f) Neither the execution and delivery of this Contract or the Deed of Trust or the consummation of the transactions contemplated hereby or thereby, nor the fulfillment of or compliance with the terms and conditions hereof or thereof conflicts with or results in a breach of the terms, conditions, or provisions of any restriction or any agreement or instrument to which the County is now a party or by which the County is bound or constitutes a default under any of the foregoing, nor conflicts with or results in a violation of any provision of applicable law or regulation HCBOC 031725 Pg. 111 16 governing the County and no representation, covenant and warranty herein is false, misleading or erroneous in any material respect; (g) The County is vested with fee simple title to the Mortgaged Property free and clear of any liens or encumbrances other than the lien created by the Deed of Trust and the other liens permitted hereby and thereby; (h) The resolutions relating to the performance by the County of this Contract, the Deed of Trust and the transactions contemplated hereby and thereby, have been duly adopted, are in full force and effect, and have not been in any respect modified, revoked or rescinded; (i) The Projects are essential to the proper, efficient and economical operation of the County and the delivery of its services, and the Projects provide essential uses and permit the County to carry out public functions that it is authorized by law to perform; (j) The County reasonably believes funds will be available to satisfy all of its obligations hereunder; (k) The County shall (1) cause its Budget Officer, as statutorily defined by the State, to include the Installment Payments and the reasonably estimated Additional Payments coming due in each Fiscal Year in the corresponding annual budget request, (2) require that the deletion of such funds from the County’s final budget or any amended budget be made only pursuant to an express resolution of the Board which explains the reason for such action, and (3) deliver notice to the Trustee and the LGC within five days after the adoption by the Board of the resolution described in clause (2) above. Nothing contained in this paragraph (k) obligates the County to appropriate money contained in the proposed budget for the payment of Installment Payments and reasonably estimated Additional Payments coming due under this Contract; (l) Money appropriated by the County to make Installment Payments in any Fiscal Year shall be used for no other purpose; (m) The County agrees, in accordance with Rule 15c2-12 (the “Rule”) promulgated by the Securities and Exchange Commission (the “SEC”), to provide 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 or ended, as applicable, June 30 of the current calendar year, 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 or ended, as applicable, June 30 of the current calendar year, the financial and statistical data as of a date not earlier than the end of such Fiscal Year for the type of information included in the tables under the captions “THE COUNTY - Debt Information” and “- Tax Information” (including subheadings thereunder) in the Official Statement dated [April 2], 2025 HCBOC 031725 Pg. 112 17 with respect to the 2025 Bonds (excluding, in each case, any information on overlapping or underlying units), to the extent such items are not included in the audited financial statements referred to in paragraph (1) above; (3) in a timely manner not in excess of 10 Business Days after the occurrence of the event, notice of any of the following events with respect to the 2025 Bonds: (A) principal and interest payment delinquencies; (B) non-payment related defaults, if material; (C) unscheduled draws on the debt service reserves reflecting financial difficulties; (D) unscheduled draws on any credit enhancements reflecting financial difficulties; (E) substitution of any 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 2025 Bonds or other material events affecting the tax status of the 2025 Bonds; (G) modification of the rights of the Beneficial Owners of the 2025 Bonds, if material; (H) call of any of the 2025 Bonds, excluding any mandatory sinking fund prepayment, if material, and tender offers; (I) defeasance of any of the 2025 Bonds; (J) release, substitution or sale of any property securing repayment of the 2025 Bonds, if material; (K) rating changes; (L) bankruptcy, insolvency, receivership or similar event of the County; (M) the consummation of a merger, consolidation, or acquisition involving the County or the sale of all or substantially all of the assets of the County, 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 such actions, other than pursuant to its terms, if material; HCBOC 031725 Pg. 113 18 (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, 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 this Section, “financial obligation” means (a) a debt obligation, (b) a derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation, or (c) a guarantee of either clause (a) or (b) above. The term “financial obligation” shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule. The County agrees that its undertaking under this paragraph is intended to be for the benefit of the Owners and the Beneficial Owners of the 2025 Bonds and is enforceable by the Trustee at the written direction of an aggregate majority of the Owners of Bonds then Outstanding and upon receipt of indemnity satisfactory to the Trustee, or by any of them, including an action for specific performance of the County’s obligations under this paragraph, but a failure to comply will not be an Event of Default under Section 12.1 of this Contract and will not result in acceleration of the principal component of Installment Payments. An action must be instituted, had and maintained in the manner provided in this paragraph for the benefit of all of the Owners and beneficial owners of the 2025 Bonds. The County may modify from time to time, consistent with the Rule, the information provided or the format of the presentation of such information, to the extent necessary or appropriate in the judgment of the County, but: (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 the Rule as of the date of the Official Statement, after taking into account any amendments or interpretations of the Rule as well as any changes in circumstances; (c) any such modification does not materially impair the interest of the Owners or the beneficial owners, as determined by nationally recognized bond counsel or by the approving vote of the Owners of a majority in principal amount HCBOC 031725 Pg. 114 19 of the 2025 Bonds pursuant to Section 9.5 of the Indenture as may be amended from time to time. 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. All documents provided to the MSRB as described above are to be provided 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 those documents or notices in a manner subsequently required by the SEC in lieu of the manner described above. The provisions of this paragraph terminate on payment, or provision having been made for payment in a manner consistent with the Rule, in full of the principal of and interest with respect to the 2025 Bonds. Section 8.2 Warranties and Representations of the Corporation. The Corporation warrants and represents to the County (all such warranties and representations continuing) that: (a) The Corporation is a nonprofit corporation duly organized, existing and in good standing under and by virtue of the laws of the State, has the power to enter into this Contract and the Indenture, and has duly authorized the execution and delivery of this Contract and the Indenture; (b) The Corporation has duly authorized this Contract and the Indenture and has caused each to be executed on its behalf in accordance with the laws of the State; (c) Neither the execution and delivery of this Contract or the Indenture, nor the fulfillment of or compliance with the terms and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of the charter or bylaws of the Corporation or any agreement or instrument to which the Corporation is now a party or by which the Corporation is bound, or constitutes a default under any of the foregoing; and (d) To the best of the Corporation’s knowledge after due and reasonable investigation, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board, or body pending or threatened against or affecting the Corporation challenging the validity or enforceability of this Contract, the Indenture or any other documents relating hereto and the performance of the Corporation’s obligations hereunder and thereunder. [END OF ARTICLE VIII] HCBOC 031725 Pg. 115 20 ARTICLE IX TAX COVENANTS AND REPRESENTATIONS The County covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest portion of the Installment Payments created by this Contract and allocable to the 2025 Bonds under Section 103 of the Code. The County will not directly or indirectly use or permit the use of any proceeds of any fund created under the Indenture allocable to the 2025 Bonds, or take or omit to take any action that would cause the obligation created by this Contract and allocable to the 2025 Bonds to be an “arbitrage bond” within the meaning of Section 148(a) of the Code. To that end, the County and the Corporation have executed the Tax Certificate and will comply with all requirements of Section 148 of the Code to the extent applicable. The County further represents and covenants that the Installment Payments created by this Contract and allocable to the 2025 Bonds are not and will not constitute a “private activity bond” as defined in Section 141 of the Code. Without limiting the generality of the foregoing, the County agrees that there shall be paid from time to time all amounts required to be rebated to the United States of America pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the obligation created by this Contract and allocable to the 2025 Bonds from time to time. This covenant shall survive the payment in full of all Installment Payments under this Contract. Notwithstanding any provision of this Article IX, (1) this Article IX shall not apply to the extent that the interest portion of the Installment Payments created under this Contract is not intended to be excludable from gross income for federal income tax purposes under Section 103 of the Code and (2) if the County shall provide to the Trustee an opinion of nationally recognized bond counsel to the effect that any action required under this Article IX or the Tax Certificate is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the obligations created by this Contract and allocable to the 2025 Bonds pursuant to Section 103 of the Code, the County, the Corporation and the Trustee may rely conclusively on such opinion in complying with the provisions hereof. [END OF ARTICLE IX] HCBOC 031725 Pg. 116 21 ARTICLE X INDEMNIFICATION To the extent permitted by applicable law and Article XIV, the County hereby agrees to indemnify, protect and save the Corporation, the LGC, the Trustee and any member, director, officer, agent or employee of the foregoing harmless from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including reasonable attorneys’ fees, costs, and expenses arising out of, connected with, or resulting, directly or indirectly, from the Projects, or from the Indenture, the Deed of Trust and this Contract or from the County’s performance under each of said documents, including, without limitation, the possession, condition or use of the Projects. The indemnification arising under this Article X shall survive and continue in full force and effect notwithstanding the payment in full of all obligations under this Contract or the sooner resignation or removal of the Trustee. [END OF ARTICLE X] HCBOC 031725 Pg. 117 22 ARTICLE XI DISCLAIMER OF WARRANTIES THE CORPORATION AND THE TRUSTEE MAKE NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROJECTS OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROJECTS. [END OF ARTICLE XI] HCBOC 031725 Pg. 118 23 ARTICLE XII DEFAULT AND REMEDIES Section 12.1 Definition of Event of Default. The County shall be deemed to be in default hereunder upon the happening of any of the following events of default (each, an “Event of Default”): (a) The County fails to make any Installment Payment on the date such Installment Payment is due hereunder; (b) The County fails to budget and appropriate money sufficient to pay all Installment Payments and the reasonably estimated Additional Payments coming due in any Fiscal Year; (c) The County fails to perform or observe any term, condition or covenant of this Contract on its part to be observed or performed, other than as referred to in (a) or (b) above, or of the Deed of Trust on its part to be observed or performed, or breaches any warranty by the County herein or therein contained, for a period of 30 days after written notice specifying such failure and requesting that it be remedied has been given to the County by the Trustee unless the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, that if the failure cannot be corrected within the stated period, the Trustee will not unreasonably withhold consent for an extension; (d) Any bankruptcy, insolvency or reorganization proceedings or similar litigation, is instituted by the County, or a receiver, custodian or similar officer is appointed for the County or any of its property, and such proceedings or appointments are not vacated or fully stayed within 90 days after the institution or occurrence thereof; or (e) Any representation or statement made by the County herein, in the Deed of Trust or in any other document executed or delivered in connection herewith is found to be incorrect or misleading in any material respect on the date made. Section 12.2 Remedies on Default. On the occurrence of any Event of Default, the Trustee may, and if required by a majority in aggregate principal amount of the Owners of the Bonds, the Trustee shall, to the extent permitted by applicable law and Article XIV, exercise any one or more of the following remedies as the Trustee may elect or as shall be directed in writing by a majority in aggregate principal amount of the Owners of the Bonds: (a) Declare the unpaid portion of the principal and interest components of Installment Payments immediately due and payable without notice or demand to the County; (b) Proceed by appropriate court action to enforce performance by the County of the applicable covenants of this Contract or to recover for the breach thereof; or (c) Exercise or direct the Deed of Trust trustee to exercise all the rights and remedies of a secured party or creditor under the Uniform Commercial Code of the State and the general laws of the State with respect to the enforcement of the security interest granted or reserved under this Contract and the Deed of Trust including, without limitation, to the extent permitted by law, re-enter and take possession of the Mortgaged Property without any court order or other process of law and without liability for entering the premises and sell, lease, sublease or make other disposition of the same in a commercially reasonable manner for the account of the County, and apply the proceeds of any such sale, lease, sublease or other disposition, after deducting all costs and expenses, including court costs and attorneys’ fees, costs and expenses, incurred with the recovery, HCBOC 031725 Pg. 119 24 repair, storage and other sale, lease, sublease or other disposition, toward the balance due under this Contract and, thereafter, shall pay any remaining proceeds to the County. Notwithstanding any other provisions herein, it is the intent of the parties hereto to comply with General Statutes of North Carolina Section 160A-20. No deficiency judgment may be rendered against the County in violation of Section 160A-20 including, without limitation, any deficiency judgment for amounts that may be owed hereunder when the sale of all or any portion of the Mortgaged Property is insufficient to produce enough money to pay in full all remaining obligations under this Contract. To the extent of any conflict between this paragraph and any other provision of this Article XII, this paragraph shall take priority. This Section 12.2 in no way limits the provisions of Article XIV. Section 12.3 Further Remedies. Notwithstanding the occurrence of an Event of Default hereunder and the exercise of any or all of the remedies listed in Section 12.2, this Contract shall remain in full force and effect and the County, to the extent permitted by applicable law and subject to Article XIV, shall be and remain liable for the full performance of all its obligations hereunder. All remedies of the Trustee are cumulative and may be exercised concurrently or separately. The exercise of any one remedy shall not be deemed an election of such remedy or preclude the exercise of any other remedy. [END OF ARTICLE XII] HCBOC 031725 Pg. 120 25 ARTICLE XIII ASSIGNMENT Section 13.1 Assignment by the County. The County may not sell, assign, lease, sublease, pledge or otherwise encumber or suffer a lien or encumbrance on or against any interest in this Contract or the Mortgaged Property (except for permitted encumbrances under Section 6.2 and as defined in the Deed of Trust) without the prior written consent of the Trustee. Notwithstanding the foregoing, the County may lease all or a portion of the Mortgaged Property subject to the following conditions: (a) the obligation of the County to make Installment Payments and Additional Payments under this Contract will remain obligations of the County; (b) the County will furnish or cause to be furnished to the Trustee a true and complete copy of such lease at least 30 days before the execution and delivery of any such lease; (c) no lease will cause the interest component of Installment Payments relating to any Bonds intended to be excludable from gross income of the recipient thereof for federal income tax purposes to become includable in gross income for federal income tax purposes; and (d) the Trustee may request to receive an Opinion of Counsel to the County to the effect that such lease is subordinate in all respects to the lien of the Deed of Trust and that such lease is subject to immediate termination at the direction of the Trustee following an Event of Default by the County under this Contract. Section 13.2 Assignment by the Corporation. The Corporation has assigned all of its interest in the Mortgaged Property and this Contract (other than its rights under Article X, certain notice rights and those Additional Payments payable to the Corporation under this Contract), including without limitation, the Corporation’s rights to receive the Installment Payments, to the Trustee. [END OF ARTICLE XIII] HCBOC 031725 Pg. 121 26 ARTICLE XIV LIMITED OBLIGATION OF THE COUNTY Notwithstanding any provision of this Contract, the Indenture or the Deed of Trust which may be to the contrary, no provision of this Contract, the Indenture or the Deed of Trust shall be construed or interpreted as creating a pledge of the faith and credit of the County within the meaning of the constitution of the State. No provision of this Contract, the Indenture or the Deed of Trust shall be construed or interpreted as creating a delegation of governmental powers nor as a donation by or a lending of the credit of the County within the meaning of the constitution of the State. This Contract, the Indenture and the Deed of Trust shall not directly or indirectly or contingently obligate the County to make any payments beyond those appropriated in the sole discretion of the County for any Fiscal Year in which this Contract is in effect; provided, however, any failure or refusal by the County to appropriate funds which results in the failure by the County to make any payment coming due hereunder will in no way obviate the occurrence of the event of default resulting from such nonpayment. No deficiency judgment may be rendered against the County in any action for breach of a contractual obligation under this Contract, and the taxing power of the County is not and may not be pledged directly or indirectly or contingently to secure any money due under this Contract. No provision of this Contract, the Indenture, or the Deed of Trust shall be construed to pledge or to create a lien on any class or source of the County’s money, nor shall any provision of this Contract, the Indenture or the Deed of Trust restrict the future issuance of any of the County’s bonds or obligations payable from any class or source of the County’s money. To the extent of any conflict between this Article XIV and any other provision of this Contract, the Indenture or the Deed of Trust, this Article shall take priority. [END OF ARTICLE XIV] HCBOC 031725 Pg. 122 27 ARTICLE XV JOINDER BY THE TRUSTEE The Trustee hereby executes this Contract to signify its agreement to be bound by the terms of this Contract applicable to it. The County and the Corporation acknowledge and agree that the Trustee shall be entitled to enforce and to benefit from the terms and conditions of this Contract. [END OF ARTICLE XV] HCBOC 031725 Pg. 123 28 ARTICLE XVI MISCELLANEOUS Section 16.1 Waiver. No covenant or condition of this Contract can be waived except by the written consent of the Corporation and the Trustee. Any failure of the Corporation or the Trustee to require strict performance by the County or any waiver by the Corporation or the Trustee of any terms, covenants or contracts herein shall not be construed as a waiver of any other breach of the same or any other term, covenant or contract herein. Section 16.2 County’s Acceptance of Rights and Responsibilities Under the Indenture. The County accepts all responsibilities assigned to it under and pursuant to the Indenture. Section 16.3 Severability. If any portion of this Contract other than Article XIV is determined to be invalid under any applicable law, such provision shall be deemed void and the remainder of this Contract shall continue in full force and effect. Section 16.4 Governing Law. This Contract is to be construed, interpreted and enforced in accordance with the laws of the State without regard to conflict of law principles. Section 16.5 Notices. Any and all notices, requests, demands, and other communications given under or in connection with this Contract are effective only if in writing and either personally delivered or mailed by registered or certified mail, postage prepaid, return receipt requested, or such other manner as is acceptable to the recipient, including Electronic Means (as defined in the Indenture), addressed as follows: If to the County: County of Harnett, North Carolina 420 McKinney Parkway Lillington, North Carolina 27546 Attention: Finance Officer If to the Corporation: Harnett County Public Facilities Corporation c/o County of Harnett, North Carolina 420 McKinney Parkway Lillington, North Carolina 27546 Attention: Finance Officer If to the Trustee: U.S. Bank Trust Company, National Association 214 North Tryon Street, 27th Floor Charlotte, North Carolina 28202-1078 CN-NC-H27A Attention: Shawna L. Hale The Trustee shall have the right to accept and act upon instructions or directions, including funds transfer instructions, pursuant to this Contract sent by Electronic Means. As used in this Section, “Electronic Means” means unsecured e-mail as a portable document format (“pdf”) or other replicating image attached to an email, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the Corporation and the County, as applicable, shall provide to the Trustee an incumbency certificate listing designated persons authorized to provide such instructions (“Authorized Officers”), which incumbency certificate shall be amended whenever a person is to be added or deleted from the listing. If the Corporation or the County elects to give the Trustee instructions via Electronic Means and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall HCBOC 031725 Pg. 124 29 be deemed controlling. The Corporation and the County agree that the Trustee cannot determine the identity of the actual sender of such instructions and that the Trustee shall conclusively presume that instructions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Corporation and the County shall be responsible for ensuring that only Authorized Officers transmit such instructions to the Trustee, and the Corporation and the County and the Authorized Officers are responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and authentication keys provided by the Trustee. The Trustee shall not be liable for any losses, costs, or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Corporation and the County agree (i) to assume all risks arising out of the use of such Electronic Means to submit instructions and direction to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions and the risk or interception and misuse by third parties, provided that such unauthorized instructions, interception or misuse was not due to the Trustee’s negligence or the compromise of Trustee’s security systems; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting instructions to the Trustee and that there may be more secure methods of transmitting instructions than the method(s) selected by the Corporation and the County; (iii) that the security procedures (if any) to be followed in connection with its transmission of instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) that it will notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. All notices, approvals, consents, requests and any communications hereunder must be in writing (provided that any communication sent to Trustee hereunder must be in the form of a document that is signed manually or by way of a digital signature provided by DocuSign (or such other digital signature provider as specified in writing to Trustee by the authorized representative), in English. The County agrees to assume all risks arising out of the use of using digital signatures and electronic methods to submit communications to Trustee, including without limitation the risk of Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. The Corporation, the County and the Trustee may, by written notice to the others, designate any further or different addresses to which subsequent notices, certificates or other communications are to be sent. Section 16.6 Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Contract. Section 16.7 Entire Contract. This Contract, together with the schedules and Exhibits hereto, constitutes the entire contract between the parties and this Contract may not be modified, amended, altered or changed except by written contract signed by the parties. Section 16.8 Binding Effect. Subject to the specific provisions of this Contract, this Contract is binding on and inures to the benefit of the parties and their respective successors and assigns (including expressly any successor of the Trustee). Section 16.9 Time. Time is of the essence of this Contract and each and all of its provisions. Section 16.10 Payments. If the date for making payment, or the last date for performance of any act or the exercising of any right, as provided in this Contract, is not a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Contract, and no interest shall accrue for the period after such nominal date. HCBOC 031725 Pg. 125 30 Section 16.11 Covenants of County, Corporation or LGC not Covenants of Officials Individually. No covenant, stipulation, obligation or agreement contained herein shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future member, director, agent, officer or employee of the County, the Corporation or the LGC in his individual capacity, and neither the members of the Board, the Board of Directors of the Corporation, the members of the LGC nor any other member, director, agent, officer or employee of the County, the Corporation or the LGC shall be subject to any personal liability or accountability by reason of the execution and delivery of the Bonds. No member of the Board, the Board of Directors of the Corporation, the LGC nor any agent, officer or employee of the County, the Corporation or the LGC shall incur any personal liability under this Contract. Section 16.12 Amounts Remaining in Funds. It is agreed by the parties hereto that any amounts remaining in the Bond Fund, the Acquisition and Construction Fund, the Prepayment Fund or any other fund or account created under the Indenture other than the Rebate Fund, on termination of this Contract and the Indenture, and after payment in full of the Bonds (or provision for payment thereof having been duly made in accordance with the provisions of this Contract or the Indenture) and fees and expenses of the Trustee in accordance with this Contract and the Indenture, shall be paid to the County by the Trustee as an overpayment of Installment Payments in accordance with the terms of the Indenture. Section 16.13 Amendments to this Contract. This Contract may not be amended by the parties hereto except in accordance with Article IX of the Indenture. In addition, no amendment to this Contract which would increase the amount or maturity of Bonds Outstanding or the interest rate with respect thereto is effective until it is approved by the LGC. Section 16.14 Execution in Counterparts; Electronic Signature. This Contract may be executed in any number of counterparts, by manual, facsimile, digital, electronic or .pdf file signatures, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument. An executed copy of this Contract delivered by facsimile, email, or other electronic means will be deemed to have the same legal effect as delivery of a manual signed copy of this Contract. This Contract and related documents may be sent and stored by electronic means. [END OF ARTICLE XVI] [SIGNATURES ON FOLLOWING PAGES] HCBOC 031725 Pg. 126 SIGNATURE PAGE 1 IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed as of the day and year first above written. HARNETT COUNTY PUBLIC FACILITIES CORPORATION By: [_____] President [SIGNATURES CONTINUED ON FOLLOWING PAGES] HCBOC 031725 Pg. 127 SIGNATURE PAGE 2 [COUNTERPART SIGNATURE PAGE TO THE INSTALLMENT FINANCING CONTRACT DATED AS OF APRIL 1, 2025, BETWEEN THE HARNETT COUNTY PUBLIC FACILITIES CORPORATION AND THE COUNTY OF HARNETT, NORTH CAROLINA] COUNTY OF HARNETT, NORTH CAROLINA By: Brent Trout County Manager [SIGNATURES CONTINUED ON FOLLOWING PAGES] HCBOC 031725 Pg. 128 SIGNATURE PAGE 3 [COUNTERPART SIGNATURE PAGE TO THE INSTALLMENT FINANCING CONTRACT DATED AS OF APRIL 1, 2025, BETWEEN THE HARNETT COUNTY PUBLIC FACILITIES CORPORATION AND THE COUNTY OF HARNETT, NORTH CAROLINA] Consented to and Accepted: U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By: Shawna L. Hale Vice President [SIGNATURES CONTINUED ON FOLLOWING PAGES] HCBOC 031725 Pg. 129 SIGNATURE PAGE 4 [COUNTERPART SIGNATURE PAGE TO THE INSTALLMENT FINANCING CONTRACT DATED AS OF APRIL 1, 2025, BETWEEN THE HARNETT COUNTY PUBLIC FACILITIES CORPORATION AND THE COUNTY OF HARNETT, NORTH CAROLINA] THIS CONTRACT HAS BEEN APPROVED UNDER THE PROVISIONS OF THE NORTH CAROLINA GENERAL STATUTES, § 159-152. Jennifer Wimmer Deputy Secretary of the Local Government Commission HCBOC 031725 Pg. 130 INSTALLMENT PAYMENT SCHEDULE – 2025 BONDS PAYMENT SCHEDULE - 1 DATE INSTALLMENT PAYMENT PRINCIPAL COMPONENT INTEREST COMPONENT TOTAL [to update at pricing] HCBOC 031725 Pg. 131 INSTALLMENT PAYMENT SCHEDULE – 2025 BONDS PAYMENT SCHEDULE - 2 HCBOC 031725 Pg. 132 A-1 EXHIBIT A FORM OF REQUISITION ACQUISITION AND CONSTRUCTION FUND U.S. Bank Trust Company, National Association 214 North Tryon Street, 27th Floor Charlotte, North Carolina 28202-1078 CN-NC-H27A Attention: Corporate Trust Services Re: Direction to Make Disbursements from the Acquisition and Construction Fund Ladies and Gentlemen: Pursuant to Section 3.11 of the Indenture of Trust dated as of April 1, 2025 (the “Indenture”) between the Harnett County Public Facilities Corporation (the “Corporation”) and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), and Section 4.2 of the Installment Financing Contract dated as of April 1, 2025 (the “Contract”) between the Corporation and the County of Harnett, North Carolina (the “County”), you are hereby directed to disburse from the 2025 Account of the Acquisition and Construction Fund referred to in the Indenture (the “Acquisition and Construction Fund”) the amount indicated below. The undersigned hereby certifies: 1. This is requisition number _______ from the 2025 Account of the Acquisition and Construction Fund. 2. The name and address of the person, firm or corporation to whom the disbursement is due is as follows: ____________________ ____________________ ____________________ ____________________ 3. The amount to be disbursed is $_____. 4. The purpose of the disbursement is to ______________. 5. The disbursement herein requested is for an obligation properly incurred, is a proper charge against the 2025 Account of the Acquisition and Construction Fund and has not been the basis of any previous disbursement. Dated this _____ day of __________, 20__. COUNTY OF HARNETT, NORTH CAROLINA By: County Representative HCBOC 031725 Pg. 133 PARKER POE DRAFT 03/03/2025 LEASE AND AGENCY AGREEMENT by and between COUNTY OF HARNETT, NORTH CAROLINA as Lessor and HARNETT COUNTY BOARD OF EDUCATION as Lessee Dated as of April 1, 2025 Prepared by and Return to: Rebecca B. Joyner, Esq. Parker Poe Adams & Bernstein LLP 301 Fayetteville St., Suite 1400 Raleigh, North Carolina 27601 HCBOC 031725 Pg. 134 LEASE AND AGENCY AGREEMENT THIS LEASE AND AGENCY AGREEMENT, dated as of April 1, 2025 (this “Lease”), and entered into by and between the COUNTY OF HARNETT, NORTH CAROLINA, a political subdivision of the State of North Carolina, as lessor (the “County”), and the HARNETT COUNTY BOARD OF EDUCATION, a body corporate which has general control and supervision of all matters pertaining to the public schools in the Harnett County Schools, and is duly organized and existing under the laws of the State of North Carolina (the “Board of Education”), W I T N E S S E T H: WHEREAS, the County and the Board of Education have determined to cooperate in a plan to finance the construction, equipping, and furnishing of school facilities in the County, including, but not limited to, Flatwoods Middle School (the “School Project”), a public school facility that will be operated by the Board of Education, WHEREAS, the Board of Education has found the School Project to be necessary and desirable to provide for improved public schools and improved public education in the County; WHEREAS, the Board of Education owns the site on which Flatwoods Middle School is located (the “Site”), as more particularly described in Exhibit A hereto, and, as part of the financing plan described above, the Board of Education has executed a deed conveying the Site and the improvements thereon to the County; WHEREAS, as a part of such plan, the County has entered into an Installment Financing Contract, dated as of April 1, 2025 (the “Contract”), between the County and Harnett County Financing Corporation (the “Corporation”), a portion of the proceeds of which will finance the School Project, and a Deed of Trust, Security Agreement and Fixture Filing, dated as of April 1, 2025 (the “Deed of Trust”), from the County for the benefit of bondholders to secure the Contract, to which this Lease will be subordinate; WHEREAS, as a part of such plan, the County proposes to lease the Site and the improvements thereon (collectively, the “Leased Property”) to the Board of Education and the Board of Education has determined to lease the Leased Property from the County; WHEREAS, the County and the Board of Education have also agreed to certain agency arrangements with respect to the accomplishment of the School Project that they intend to memorialize in this agreement, including the designation of the Board of Education as the County’s agent with respect to the School Project, which appointment the Board of Education is willing to accept; WHEREAS, to memorialize this Lease and the joint processes to be followed in connection with the financing and accomplishment of the School Project, the Board of Education and the County have determined to enter into this Lease; NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS; RULE OF CONSTRUCTION All capitalized terms used in this Lease and not otherwise defined herein have the meanings assigned to them in the Contract and the Deed of Trust, unless the context clearly requires otherwise. In HCBOC 031725 Pg. 135 2 addition, the following terms have the meanings specified below, unless the context clearly requires otherwise: “Agreed Upon Amount” means $[to include project fund deposit amount]. “Board of Education Representative” means the Board of Education’s Superintendent or Assistant Superintendent of Financial Services or any other person at the time designated, by a written certificate furnished to the County and signed on the Board of Education’s behalf by its Chair, to act on the Board of Education’s behalf for the purpose of performing any act under this Lease. “Business Day” means a day on which the County or the Board of Education is not required or authorized by law to remain closed. “Contract” means the Installment Financing Contract dated as of April 1, 2025 between the Corporation and the County and any amendments or supplements thereto, including the exhibits attached thereto. “County Representative” means (1) the Finance Officer of the County or the Harnett or persons at the time designated to act on behalf of the County for the purpose of performing any act under this Lease by a written certificate furnished to the Board of Education containing the specimen signatures of such person or persons and signed on behalf of the County by the County Manager and the Finance Officer of the County, or (2) if any or all of the County’s rights and obligations are assigned hereunder, the person or persons at the time designated to act on behalf of the County and the assignee by a written certificate similarly furnished and of the same tenor. “Deed of Trust” means the Deed of Trust, Security Agreement and Fixture Filing dated as of April 1, 2025 from the County to the deed of trust trustee named therein, for the benefit of the beneficiary named therein or its assignees. “Effective Date” means April 17, 2025, and is also referred to herein as the “Closing Date”. “Electronic Means” means the following communications methods: e-mail or any secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys. “Event of Default” means one or more events of default as defined in Section 12.1. “Lease” means this Lease and Agency Agreement, as it may be duly amended. “Lease Term” means the term of this Lease as determined under Article IV. “Lease Year” means, initially, from the Effective Date through June 30, 2025, and, thereafter, means the twelve-month period of each year commencing on July 1 and ending on the next June 30. “Leased Property” means the site of Flatwoods Middle School, as described in Exhibit A, and the improvements thereon. All references to articles or sections are references to articles or sections of this Lease, unless the context clearly indicates otherwise. HCBOC 031725 Pg. 136 3 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES The County and the Board of Education each represent, covenant and warrant for the other’s benefit as follows: (a) Neither the execution and delivery of this Lease, nor the fulfillment of or compliance with its terms and conditions, nor the consummation of the transactions contemplated hereby, results or will result in a breach of the terms, conditions and provisions of any agreement or instrument to which either is now a party or by which either is bound, or constitutes a default under any of the foregoing. (b) To the knowledge of each party, there is no litigation or proceeding pending or threatened against such party (or against any other person) affecting the rights of such party to execute or deliver this Lease or to comply with its obligations under this Lease. Neither the execution and delivery of this Lease by such party, nor compliance by such party with its obligations under this Lease, requires the approval of any regulatory body or any other entity the approval of which has not been obtained. ARTICLE III DEMISING CLAUSE The County hereby leases the Leased Property to the Board of Education and the Board of Education hereby leases the Leased Property from the County, in accordance with the provisions of this Lease, to have and to hold for the Lease Term. ARTICLE IV LEASE TERM Section 4.1 Commencement. The Lease Term commences on the Effective Date. Section 4.2 Termination. The Lease Term terminates on the earlier of the following dates or events: (a) the date on which the County has paid or made provision for all Installment Payments (as defined in the Contract) and all other payments due under the Contract in accordance with its terms; or (b) an Event of Default and termination of this Lease under Article XII. ARTICLE V QUIET ENJOYMENT Section 5.1 Quiet Enjoyment. The County covenants that the Board of Education shall, during the Lease Term, peaceably and quietly have and hold and enjoy the Leased Property without suit, trouble or hindrance from the County, except as expressly required or permitted by this Lease. The County shall not interfere with the quiet use and enjoyment of the Leased Property during the Lease Term. The County shall, at the Board of Education’s request, join and cooperate fully in any legal action in which the Board of Education asserts its right to such possession and enjoyment, or which involves the imposition of any taxes or other governmental charges on or in connection with the Leased Property. In addition, the Board of Education may at its own expense join in any legal action affecting its possession and enjoyment of the HCBOC 031725 Pg. 137 4 Leased Property, and shall be joined (to the extent legally possible, and at the Board of Education’s expense) in any action affecting its liabilities hereunder. Section 5.2 Transfer Upon Lease Termination. At the end of the Lease Term under Section 4.2(a), unless the parties hereto agree otherwise, the County hereby agrees to execute, deliver and record a deed transferring title to the Leased Property to the Board of Education, which deed shall be of the same type as the deed the Board of Education executed and delivered to convey title to the Leased Property to the County, together with such other documents as are necessary to convey to the Board of Education good and marketable title to the Leased Property, subject only to: (a) Permitted Encumbrances; and (b) any encumbrance or imperfection caused by or attributable to the Board of Education. ARTICLE VI CONSIDERATION FOR LEASE Section 6.1 Use of Leased Property; Assumption of Obligations. The Board of Education agrees to use the Leased Property for public schools or other public education purposes in fulfillment of its obligation, shared by the County, to provide for improved public education in the County. In addition, in consideration of its rights under this Lease, the Board of Education undertakes the obligations imposed on it under this Lease. Notwithstanding anything in this Lease to the contrary, the Board of Education shall not use the Leased Property in a manner that would cause the interest components of the Installment Payments intended to be excludable from gross income for purposes of federal income taxation under Section 103 of the Internal Revenue Code of 1986, as amended, to be includable in gross income. Section 6.2 Payments. In partial consideration for its acquisition of rights to use the Leased Property during the Lease Term, the Board of Education agrees to pay to the County annual rent in the amount of $1 payable in advance on the Effective Date (receipt of which is hereby acknowledged) and on the first day of each Lease Year thereafter. ARTICLE VII CONSTRUCTION AND OTHER ACCOMPLISHMENT OF THE SCHOOL PROJECT AND CERTAIN RELATED COVENANTS Section 7.1 Construction and Other Accomplishment of the School Project. The Board of Education, as agent of the County, will contract for the accomplishment of the School Project. The County will finance the cost of the School Project with a portion of the proceeds of the Contract. The Board of Education agrees that it will cause all construction contracts and other related documents for the School Project to be in the name of the Board of Education, as agent of the County. The Board of Commissioners of the County hereby delegates authority to the Board of Education to approve contracts, purchase orders and change orders, provided that such approval does not cause the total cost of the School Project to exceed the Agreed Upon Amount. [The County and the Board of Education agree that all amounts received by the County as refunds of State of North Carolina sales tax with respect to expenditures made in connection with the School Project will be deposited in the Acquisition and Construction Fund created in conjunction with the execution and delivery of the Contract and documents related thereto, and used, first, for capital construction costs of the School Project, and once the School Project is complete, for the payment of debt service related thereto.] [to confirm] Without limiting the generality of the foregoing and by way of illustration and not limitation: (a) the Board of Education shall cause the construction agreements related to the School Project to be reviewed and approved as to legal form in accordance with Board of Education policies and practices for legal review of contracts prior to award; HCBOC 031725 Pg. 138 5 (b) upon commencement of construction, the Board of Education shall supervise and oversee the construction of improvements and the purchase of any equipment, acting through its architects and agents; certify to the County through the architect and the Board of Education for direct payment by the County of the contractors’ pay requests, fees, and cost of the School Project; resolve any disputes arising under the construction contract at its expense; and do all things necessary and required to commence and complete the School Project; (c) the Board of Education shall submit all contracts and amendments thereto, including change orders, to the County’s Finance Officer for her files; (d) any increase in the costs attributable to the School Project resulting from such a change shall, to the extent the increased cost causes the total School Project costs to exceed the Agreed Upon Amount, be payable solely from other funds of the Board of Education, which funds shall be transferred to the County for deposit to the credit of the Acquisition and Construction Fund before the approval of any such change in the School Project; (e) the Board of Education shall include the following language in all construction agreements: Pursuant to N.C.G.S. § 105-164.14, the Owner is eligible for sales and use tax refunds on all materials which become a permanent part of the construction. The Contractor agrees to provide the Owner documentation which meets the requirements of Sales and Use Tax Regulation 42 regarding requests for refund of sales and use taxes. Those requirements are outlined below: All refund claims must be substantiated by proper documentary proof and only those taxes actually paid by the claimant during the fiscal year covered by the refund claim may be included in the claim. Any local sales or use taxes included in the claim must be separately stated in the claim for refund. In cases where more than one county's sales and use tax has been paid, a break down must be attached to the claim for refund showing the amount of each county's local tax separately. To substantiate a refund claim for sales and use taxes paid on purchases of building materials, supplies, fixtures, and equipment by its Contractor, the claimant must secure from such Contractor certified statements setting forth the cost of the property purchased from each vendor and the amount of state and local sales and/or use taxes paid thereon. Such statement must also include the cost of any tangible personal property withdrawn from the Contractor's warehouse stock and the amount of state and local sales or use tax paid thereon by the Contractor. Similar certified statements by his subcontractors must be obtained by the General Contractor and furnished to the claimant (Owner). Any local sales or use taxes included in the Contractor's statements must be shown separately from the State sales or use taxes. The Contractor's statements must not contain sales or use taxes paid on purchases of tangible personal property purchased by such Contractors for use in performing the contract which does not annex to, affix to or in some manner become a part of the building or structure being erected, altered or repaired for the governmental entities as defined by G.S. § 105-164.14(c). Examples of property on which sales and use tax has been paid by the Contractor and which should not be included in the HCBOC 031725 Pg. 139 6 Contractor's statement are scaffolding, forms for concrete, fuel for the operation of machinery and equipment, tools, equipment repair parts and equipment rentals, blueprints, etc. The Contractor shall submit notarized sales tax certificates which meet the requirements detailed above with each Application for Payment. Payment will not be made until the sales tax certificate(s) have been submitted to the Owner. Owner is the recipient of sales tax refunds and no such funds shall be provided to Contractor, or claim made by Contractor therefor. (f) the Board of Education shall secure and maintain Builder’s Risk insurance on any school facilities that are part of the School Project during construction, or require in the construction agreement that the contractor maintain such coverage; (g) the Board of Education shall require in the construction agreement that the contractor maintain such types and amounts of insurance coverage as is customarily required by a school administrative unit for the construction of public schools, to include comprehensive general liability insurance endorsed to include the County, its officers, employees and agents as Additional Insured. Section 7.2 Board of Education to Act as Agent of the County. The County appoints the Board of Education as its agent, and the Board of Education hereby accepts such appointment, in connection with all phases of the design, construction, supervision and other accomplishment of the School Project. The Board of Education, as the agent of the County for the foregoing purposes, shall cause the School Project to be completed in accordance with the respective construction documents, the Contract, the Deed of Trust, and any applicable requirements of governmental authorities and law. The Board of Education represents that it has reviewed all provisions concerning the construction and other accomplishment of the School Project in the Contract and approves such provisions. The Board of Education shall take possession of the Leased Property on the Effective Date. Title to the Leased Property during the Lease Term shall be held by the County, subject only to Permitted Encumbrances. Section 7.3 Right of the Board of Education to Enforce Contracts. The County hereby assigns to the Board of Education all of its rights and powers under all purchase orders and contracts the Board of Education enters into with respect to the School Project, and the Board of Education has the right to enforce in its own name or the name of the County such purchase orders or contracts; but this assignment by the County does not prevent the County from asserting said rights and powers on its own behalf. Section 7.4 Construction Conferences. The Board of Education agrees that it will, on the request of the County Manager, provide to the County Manager or her designee timely notice of all conferences with representatives of the architects, contractors and vendors with respect to the School Project and that the County Manager or her designee has the right to attend all such conferences. Section 7.5 County to Manage Payment Process. The County shall retain responsibility for the payment of all invoices related to construction of the School Project and all requests for payment should be sent to the County Finance Officer within five business days of receipt for payment. Section 7.6 Maintenance, Repair, Taxes and Assessments. (a) Maintenance; Repair. The Board of Education shall use, or cause to be used, the Leased Property in a careful and proper manner, in compliance with all applicable laws and regulations, and, at its sole expense, shall service, repair, maintain and insure the Leased Property, or cause such to be serviced, HCBOC 031725 Pg. 140 7 repaired, maintained and insured. The Board of Education shall continually maintain customary insurance on the Leased Property as required in the Contract, including, but not limited to, the following: (1) all-risk, fire, casualty and extended coverage insurance covering the Leased Property in an amount not less than one hundred percent of the full insurable replacement value thereof, as such value may from time to time be determined, including any improvements, alterations, and additions; and (2) comprehensive general liability insurance in an amount customarily maintained by the Board of Education for public schools, which policy shall be endorsed to include the County, its officers, employees and agents as additional insured. (b) Taxes and Assessments. The Board of Education shall also pay, or cause to be paid, all taxes and assessments, including, but not limited to, utility charges, of any type or nature levied, assessed or charged against any portion of the Leased Property, provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Board of Education shall be obligated to pay only such installments as are required to be paid as and when the same become due. (c) Contests. The Board of Education may, at its sole expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, if any such contest occurs, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom, but before such nonpayment it shall consult with the County and, if the County requires, furnish the County with the opinion of a counsel acceptable to the County, to the effect that, by nonpayment of any such items, the interest of the County in the Leased Property will not be materially endangered and that the Leased Property will not be subject to loss or forfeiture. The County will cooperate fully in such contest on the request and at the expense of the Board of Education. Section 7.7 Modification of Leased Property, Liens. (a) Additions, Modifications and Improvements. The Board of Education shall, at its own expense, have the right to make, or cause to be made, additions, modifications and improvements to any portion of the Leased Property if such addition, modifications or improvements are necessary or beneficial for the use of such portion of the Leased Property. All such additions, modifications and improvements shall thereafter comprise part of the Leased Property and be subject to the provisions of this Lease. Such additions, modifications and improvements shall not in any way cause the interest components of the Installment Payments intended to be excludable from gross income for purposes of federal income taxation under Section 103 of the Internal Revenue Code of 1986, as amended, to be includable in gross income. (b) Liens. The Board of Education will not permit any mechanic’s or other lien to be established or remain against the Leased Property for labor or materials furnished in connection with any additions, modifications or improvements made by the Board of Education under this Section, but if any such lien is filed or established and the Board of Education first notifies, or causes to be notified, the County of the Board of Education’s intention to do so, the Board of Education may in good faith contest any lien filed or established against the Leased Property and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom and shall provide the County with full security against any loss or forfeiture which might arise from the nonpayment of any such item. The County will cooperate fully in any such contest on the request and at the expense of the Board of Education. Except as provided in this Article and except as the County may consent thereto, the Board of Education shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Leased Property, other than the respective rights of the Board of Education and the County as herein provided. Except as provided in this Article, the Board of Education shall promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim for which it is HCBOC 031725 Pg. 141 8 responsible, if the same shall arise at any time; provided that the Board of Education may contest such liens, charges, encumbrances, or claims if it desires to do so. The Board of Education shall reimburse the County for any expense incurred by the County in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim. ARTICLE VIII COOPERATION BETWEEN COUNTY AND BOARD OF EDUCATION Section 8.1 County’s Cooperation. The County shall cooperate fully with the Board of Education in filing any proof of loss or taking any other action under this Lease. Neither the County nor the Board of Education may voluntarily settle, or consent to the settlement of, any proceeding arising out of any insurance claim with respect to the Leased Property without the other’s written consent. Section 8.2 Board of Education’s Cooperation. The Board of Education shall faithfully discharge all duties imposed on the County in the Contract and the Deed of Trust with respect to the accomplishment of the School Project and the insuring of the School Project. Section 8.3 Advances; Performance of Obligations. If the Board of Education fails to take any action required of it under this Lease, then the County may (but is under no obligation to) perform such obligation. The Board of Education agrees to reimburse the County for any costs incurred by the County in connection with performing such obligation. ARTICLE IX DISCLAIMER OF WARRANTIES; OTHER COVENANTS Section 9.1 Disclaimer of Warranties. THE COUNTY MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR A PARTICULAR USE OF THE LEASED PROPERTY, THE SCHOOL PROJECT OR ANY PART THEREOF OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE LEASED PROPERTY, THE SCHOOL PROJECT OR ANY PART THEREOF. The Board of Education will participate in the development of the School Project. The County will not be liable for any direct or indirect, incidental, special or consequential damage in connection with or arising out of this Lease or the existence, furnishing, functioning or use by anyone of any item, product or service provided for herein. The Board of Education acknowledges and agrees that the County did not and will not design the School Project, that the County has not supplied, and will not supply, any plans or specifications with respect thereto, and that the County (a) is not a manufacturer of, or a dealer in, any of the component parts of the School Project or similar projects, (b) has not made, and will not make, any recommendation, given or give any advice or taken any other action with respect to (1) the choice of any supplier, vendor or designer of, or any other contractor with respect to, the School Project or any component part thereof or any property or rights relating thereto, or (2) any action taken or to be taken with respect to the School Project or any component part thereof or any property or rights relating thereto at any stage of the construction thereof, (c) has not at any time had physical possession of the School Project and will not physically possess the School Project or any component part thereof or made or make any inspection thereof or any property or rights relating thereto, and (d) has not made and will not make any warranty or other representation, express or implied, that the School Project or any component part thereof or any property or rights relating thereto (1) will not result in or cause injury or damage to persons or property, (2) has been or will be properly designed or constructed or will accomplish the results which the Board of Education intends therefor, or (3) is or will be safe in any manner or respect. HCBOC 031725 Pg. 142 9 Section 9.2 Further Assurances; Corrective Instruments. The Board of Education and the County agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Leased Property hereby leased or intended so to be, or for otherwise carrying out the intention hereof. Section 9.3 Board of Education and County Representatives. Whenever under the provisions hereof the approval of the Board of Education or the County is required to take some action at the request of the other, unless otherwise provided, such approval or such request is to be given for the Board of Education by the Board of Education Representative and for the County by the County Representative, and the Board of Education and the County are authorized to act on any such approval or request of such representative of the other. Section 9.4 Compliance with Requirements. During the Lease Term, the Board of Education and the County shall observe and comply promptly with all current and future orders of all courts having jurisdiction over the Leased Property or any portion thereof (or be diligently and in good faith contesting such orders), and all current and future requirements of all insurance companies’ written policies covering the Leased Property or any portion thereof. ARTICLE X TITLE TO LEASED PROPERTY; LIMITATIONS ON ENCUMBRANCES Except for personal property purchased by the Board of Education at its own expense, title to the Leased Property and any and all additions and modifications to or replacements of any portion of the Leased Property shall be held in the County’s name, subject only to Permitted Encumbrances, until conveyed as provided in this Lease, notwithstanding (a) the occurrence of one or more events of default as defined in Section 12.1 of the Contract; (b) the occurrence of any event of damage, destruction, condemnation or construction or title defect or (c) the violation by the County of any provision of this Lease. The County will not transfer the Site to any party, other than the Board of Education, or voluntarily create any liens or encumbrances on the Site, except under the Deed of Trust, without the Board of Education’s consent. The Board of Education has no right, title or interest in the Leased Property or any additions and modifications to or replacements of any portion of the Leased Property, except as expressly set forth in this Lease. ARTICLE XI ASSIGNMENT, SUBLEASING AND INDEMNIFICATION Section 11.1 Board of Education’s Assignment or Subleasing. The Board of Education may not assign or sublease the Leased Property, in whole or in part, without the prior written consent of the County, which consent shall not be unreasonably withheld. Section 11.2 Indemnification. To the extent permitted by law, the Board of Education agrees to indemnify and save the County, its officers, employees and agents harmless against and from all claims by or on behalf of any person, firm, corporation or other legal entity arising from the operation or management of the Leased Property or the School Project by the Board of Education during the Lease Term, including any claims arising from: (a) any condition of the Leased Property, (b) any act of negligence of the Board of Education or of any of its agents, contractors or employees or any violation of law by the Board of Education or breach of any covenant or warranty by the Board of Education hereunder; or (c) the incurrence of any cost or expense in connection with the accomplishment of the School Project in excess of the Agreed Upon Amount. The Board of Education further agrees to investigate, handle, respond to, provide defense for, and defend the same at its sole expense and agrees to bear all other costs and expenses HCBOC 031725 Pg. 143 10 related thereto. The Board of Education shall be notified promptly by the County of any action or proceeding brought in connection with any claims arising out of circumstances described in (a), (b) or (c) above. ARTICLE XII EVENTS OF DEFAULT Section 12.1 Events of Default. Each of the following is an “Event of Default” under this Lease and the term “Default” means, whenever it is used in this Lease, any one or more of the following events: (a) The Board of Education’s or the County’s failure to observe and perform any covenant, condition or agreement on its part to be observed or performed in this Lease for a period of 30 days after written notice specifying such failure and requesting that it be remedied has been given to the defaulting party by the non-defaulting party, unless the non-defaulting party agrees in writing to an extension of such time before its expiration; but if the failure stated in such notice cannot be corrected within the applicable period, the non-defaulting party shall not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the defaulting party within the applicable period and diligently pursued until such failure is corrected and, further, if by reason of any event or occurrence constituting force majeure the defaulting party is unable in whole or in part to carry out any of its agreements contained herein (other than its obligations contained in Section 6.2 or Section 8.1 hereof), the defaulting party shall not be deemed in default during the continuance of such event or occurrence. (b) The dissolution or liquidation of the Board of Education or the County or the voluntary initiation by the Board of Education or the County of any proceeding under any federal or state law relating to bankruptcy, insolvency, arrangement, reorganization, readjustment of debt or any other form of debtor relief, or the initiation against the Board of Education or the County of any such proceeding which shall remain undismissed for 60 days, or the entry by the Board of Education or the County into an agreement of composition with creditors or the Board of Education’s or the County’s failure generally to pay its debts as they become due. Section 12.2 Remedies on Default. Whenever any Event of Default has happened and is continuing, the non-defaulting party may terminate this Lease or take whatever action at law or in equity may appear necessary or desirable, including the appointment of a receiver, to collect the amounts then due, or to enforce performance and observance of any obligation, agreement or covenants under this Lease. Section 12.3 No Remedy Exclusive. No remedy herein conferred on or reserved is intended to be exclusive, and every such remedy is cumulative and in addition to every other remedy given hereunder and every remedy now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing on any default impairs any such right or power, and any such right and power may be exercised from time to time as may be deemed expedient. It is not necessary to give any notice in order to be entitled to exercise any remedy reserved in this Article XII, other than such notice as may be required in this Article XII. Section 12.4 Waivers. If any agreement contained herein is breached by either party and thereafter waived by the other party, such waiver is limited to the particular breach so waived and will not be deemed to waive any other breach hereunder. Section 12.5 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws. The Board of Education and County agree, to the extent permitted by law, that in the case of a termination of the Lease Term by reason of an Event of Default, neither the Board of Education nor the County nor any one claiming through or under either of them shall or will set up, claim or seek to take advantage of any HCBOC 031725 Pg. 144 11 appraisement, valuation, stay, extension or redemption laws now or hereafter in force in order to prevent or hinder the enforcement of any remedy provided hereunder; and the Board of Education and the County, for themselves and all who may at any time claim through or under either of them, each hereby waives, to the full extent that it may lawfully do so, the benefit of such laws. ARTICLE XIII MISCELLANEOUS Section 13.1 Notices. All notices, certificates or other communications hereunder are sufficiently given when delivered by Electronic Means or delivered or mailed by certified or registered mail, postage prepaid, as follows: If intended for the County, addressed to it at the following address: County of Harnett, North Carolina PO Box 760 Lillington, North Carolina 27546 Attention: Finance Officer If intended for the Board of Education, addressed to it at the following address: Harnett County Board of Education 1008 South 11th Street Lillington, North Carolina 27546 Attention: Superintendent Section 13.2 Binding Effect. This Lease is binding on and inures to the benefit of the Board of Education and the County, subject, however, to the limitations contained in Article XI. Section 13.3 Net Lease. This Lease is a “net lease,” and the Board of Education shall pay absolutely net during the Lease Term all other payments required hereunder, free of any deductions, and without abatement or setoff. Section 13.4 Payments Due on Non-Business Days. If the date for making any payment or the last day for performance of any act or the exercising of any right, as provided in this Lease, is not a Business Day, such payment may be made or act performed or right exercised on the next succeeding day that is a Business Day with the same force and effect as if done on the nominal date provided in this Lease. Section 13.5 Severability. If any provision of this Lease, other than the requirement of the County to provide quiet enjoyment of the Leased Property, is held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 13.6 Execution in Counterparts; Electronic Signatures. This Lease may be executed in any number of counterparts, by manual, facsimile, digital, electronic or .pdf file signatures, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument. An executed copy of this Lease delivered by Electronic Means will be deemed to have the same legal effect as delivery of a manual signed copy of this Lease. This Lease and related documents may be sent and stored by Electronic Means. Section 13.7 Applicable Law. This Lease is governed by and to be construed in accordance with the laws of the State of North Carolina, without regard to conflict of law principles. HCBOC 031725 Pg. 145 12 Section 13.8 Captions. The captions or headings herein are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Lease. Section 13.9 Amendments and Further Instruments. The County and the Board of Education may, from time to time, execute and deliver such amendments to this Lease and such further instruments as may be required or desired for carrying out the expressed intention of this Lease. Section 13.10 Memorandum of Lease. The County and the Board of Education shall, on or before the Closing Date, file this Lease or a memorandum of this Lease legally sufficient to comply with the relevant provisions of the North Carolina General Statutes with the Harnett County Register of Deeds. Section 13.11 Subordinate to Deed of Trust. This Lease is subordinate to the Deed of Trust. [SIGNATURE PAGES BEGIN ON THE FOLLOWING PAGE] HCBOC 031725 Pg. 146 13 IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed in their corporate names by their duly authorized officers, all as of the day and year first above written. COUNTY OF HARNETT, NORTH CAROLINA By: [SEAL] Matt Nicol Chairman of the Board of Commissioners ATTEST: Melissa Capps Clerk to the Board of Commissioners HCBOC 031725 Pg. 147 14 [COUNTERPART SIGNATURE PAGE TO LEASE AND AGENCY AGREEMENT] HARNETT COUNTY BOARD OF EDUCATION By: [SEAL] Joseph W. Powell, Jr. Chairman of the Board of Education ATTEST: Tammy Johnson Clerk to the Board of Education HCBOC 031725 Pg. 148 15 STATE OF NORTH CAROLINA ) ) COUNTY OF HARNETT ) I, a Notary Public of the County and State aforesaid, certify that MELISSA CAPPS (the “Signatory”) personally came before me this day and acknowledged that she is the Clerk to the Board of Commissioners for the County of Harnett, North Carolina and that by authority duly given and as the act of said County, the foregoing instrument was signed in its name by the Chairman of the Board of Commissioners of the County of Harnett, North Carolina and attested by her as Clerk to said Board of Commissioners. I certify that the Signatory personally appeared before me this day, and (check one of the following) ______(I have personal knowledge of the identity of the Signatory); or ______(I have seen satisfactory evidence of the Signatory’s identity, by a current state or federal identification with the Signatory’s photograph in the form of: (check one of the following) ___ a driver's license or ___ in the form of _______________________); or ______(a credible witness has sworn to the identity of the Signatory). The Signatory acknowledged to me that she voluntarily signed the foregoing document for the purpose stated therein and in the capacity indicated. WITNESS my hand and official stamp or seal, this the ______ day of April, 2025. Notary Public Print: Name: [Note: Notary Public must sign exactly as on notary seal] My Commission Expires:  [NOTARY SEAL] (MUST BE FULLY LEGIBLE) HCBOC 031725 Pg. 149 16 STATE OF NORTH CAROLINA ) ) COUNTY OF HARNETT ) I, a Notary Public of the County and State aforesaid, certify that TAMMY JOHNSON (the “Signatory”) personally came before me this day and acknowledged that she is the Executive Assistant to the Harnett County Board of Education and that by authority duly given and as the act of said Board of Education, the foregoing instrument was signed in its name by the Chairman of said Board of Education and attested by her as Executive Assistant to said Board of Education. I certify that the Signatory personally appeared before me this day, and (check one of the following) ______(I have personal knowledge of the identity of the Signatory); or ______(I have seen satisfactory evidence of the Signatory’s identity, by a current state or federal identification with the Signatory’s photograph in the form of: (check one of the following) ___ a driver's license or ___ in the form of _______________________); or ______(a credible witness has sworn to the identity of the Signatory). The Signatory acknowledged to me that he voluntarily signed the foregoing document for the purpose stated therein and in the capacity indicated. WITNESS my hand and official stamp or seal, this the ______ day of April, 2025. Notary Public Print: Name: [Note: Notary Public must sign exactly as on notary seal] My Commission Expires:  [NOTARY SEAL] (MUST BE FULLY LEGIBLE) HCBOC 031725 Pg. 150 A-1 EXHIBIT A LEGAL DESCRIPTION OF THE SITE Flatwoods Middle School [____] HCBOC 031725 Pg. 151 PARKER POE DRAFT 02/13/2025 Prepared by and Return to: Rebecca B. Joyner, Esq. Parker Poe Adams & Bernstein LLP 301 Fayetteville Street, Suite 1400 Raleigh, North Carolina 27601 NORTH CAROLINA HARNETT COUNTY COLLATERAL IS OR INCLUDES FIXTURES DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING is made and entered into as of the 1st day of April, 2025 (the “Deed of Trust”), from the COUNTY OF HARNETT, NORTH CAROLINA (hereinafter called the “the Grantor”), a political subdivision duly created and validly existing under the laws of the State of North Carolina, whose address is 420 McKinney Parkway, Lillington, North Carolina 27546, to REBECCA B. JOYNER, as trustee (hereinafter referred to as the “Trustee”), for the benefit of HARNETT COUNTY FINANCING CORPORATION, a nonprofit corporation duly created, existing and in good standing under the laws of the State of North Carolina, whose address is 420 McKinney Parkway, Lillington, North Carolina 27546, as grantee (the “Corporation”) (the Corporation and its successors and assigns are hereinafter referred to as “the Beneficiary”). RECITALS: The Grantor and the Corporation have entered into an Installment Financing Contract dated as of April 1, 2025 (the “Contract”), pursuant to which (1) the Corporation has agreed to advance certain funds to enable the Grantor to (a) finance the Projects (as defined in the Contract), and (b) pay the costs related to the execution and delivery of the Contract; and (2) the Grantor has agreed to make the Installment Payments (as defined in the Contract) to the Corporation. The Contract is incorporated herein by this reference. The Corporation has assigned substantially all of its rights under the Contract to U.S. Bank Trust Company, National Association pursuant to an Indenture of Trust dated as of April 1, 2025 (the “Indenture”) between the Corporation and U.S. Bank Trust Company, National Association, as bond trustee (the “Bond Trustee”), under which the Limited Obligation Bonds (County of Harnett, North Carolina), Series 2025 (the “2025 Bonds”), evidencing proportionate undivided interests in rights to receive certain HCBOC 031725 Pg. 152 2 Revenues (as defined in the Contract) under the Contract will be executed, delivered and sold. The Bond Trustee is unwilling to enter into the Indenture and the Corporation is unwilling to enter into the Contract unless the Grantor secures the obligations under the Contract and this Deed of Trust by the conveyance of the Mortgaged Property (as defined below), and the improvements and fixtures thereon, and as more fully described in this Deed of Trust. This Deed of Trust has been executed and delivered to secure (1) the obligations of the Grantor to make the Installment Payments and (2) the payment and performance of all of the other liabilities and obligations, whether now existing or hereafter arising, of the Grantor to the Corporation under the Contract and this Deed of Trust, all such obligations and liabilities described in (1) or (2) above hereinafter collectively called the “Indebtedness.” It is intended that this Deed of Trust comply with the provisions of Sections 45-67 et seq. of the North Carolina General Statutes. For purposes of complying with such provisions, the Grantor hereby represents as follows: (a) This Deed of Trust has been executed and delivered by the Grantor to secure future Indebtedness which may be incurred from time to time under the Contract; (b) The maximum principal amount, including present and future Indebtedness, which may be secured by this Deed of Trust at any one time is $[200,000,000] (exclusive of advances that may be made under the terms of the Contract or this Deed of Trust for fire and extended coverage insurance, taxes, assessment or other necessary expenditures for the preservation of the real property), subject to the limitation that at no time shall the total principal amount of Indebtedness secured hereby exceed said maximum principal sum of $[200,000,000] together with accrued interest and the payment for fire and extended coverage insurance, taxes, assessments or other necessary expenditures for the preservation of the real property; provided that the foregoing limitation shall apply only to the lien upon real property located in the State of North Carolina created by this Deed of Trust and shall not in any manner limit, affect or impair any grant of a security interest in or lien on any other real property or any personal property in favor of the Beneficiary; (c) The period within which such future Indebtedness may be incurred is the period between the date hereof and the date 30 years from the date hereof; and (d) It shall not be a requirement for any such future Indebtedness to be secured hereby that the Grantor sign an instrument or other notation stipulating that such Indebtedness is secured by this Deed of Trust, as no such future Indebtedness is required, under the Contract or otherwise, to be evidenced by a written instrument or notation. The Grantor desires to secure (a) the payment of the Indebtedness and any renewals, modifications or extensions thereof, in whole or in part, and (b) the additional payments hereinafter agreed to be made by or on behalf of the Grantor, by a conveyance of the lands and security interests hereinafter described. NOW, THEREFORE, in consideration of the premises and for the purposes aforesaid, and in further consideration of the sum of Ten Dollars ($10.00) paid to the Grantor by the Trustee and other valuable considerations, receipt of which is hereby acknowledged, the Grantor has given, granted, bargained and sold, and by these presents does give, grant, bargain, sell and convey unto the Trustee, its HCBOC 031725 Pg. 153 3 heirs, successors and assigns, the following property (hereinafter collectively referred to as the “Mortgaged Property”): (a) The real property lying and being in Harnett County, North Carolina and described below in the legal description attached as an exhibit hereto (hereinafter referred to as the “Land”): SEE EXHIBIT “A” ATTACHED HERETO FOR LAND DESCRIPTION, WHICH EXHIBIT “A” IS INCORPORATED HEREIN BY REFERENCE. (b) All buildings, structures, additions and improvements of every nature whatsoever now or hereafter situated on or about the Land (the “Improvements”). (c) Notwithstanding Section 1.16 hereof, all gas and electric fixtures, radiators, heaters, engines and machinery, boilers, ranges, elevators and motors, plumbing and heating fixtures, carpeting and other floor coverings, fire extinguishers and any other safety equipment required by governmental regulation or law, washers, dryers, water heaters, mirrors, mantels, air conditioning apparatus, refrigerating plants, refrigerators, cooking apparatus and appurtenances, window screens, awnings and storm sashes and other machinery, equipment or other tangible personal property, which are or shall be so attached to the Improvements, including all extensions, additions, improvements, betterments, renewals, replacements and substitutions, or proceeds from a permitted sale of any of the foregoing, as to be deemed to be fixtures under North Carolina law (collectively, the “Fixtures”) and accessions to the Land and a part of the Mortgaged Property as between the parties hereto and all persons claiming by, through or under them, and which shall be deemed to be a portion of the security for the Indebtedness. The location of the collateral described in this paragraph is also the location of the Land, and the record owner of the Land is the Grantor. (d) Notwithstanding Section 1.15 hereof, all easements, rights-of-way, strips and gores of land, vaults, streets, ways, alleys, passages, sewer rights, waters, water courses, water rights and powers, minerals, flowers, shrubs, crops, trees, timber and other emblements now or hereafter located on the Land or under or above the same or any part or parcel thereof, and all estates, rights, titles, interests, privileges, liberties, tenements, hereditaments and appurtenances, reversion and reversions, remainder and remainders, whatsoever, in any way belonging, relating or appertaining to the Mortgaged Property or any part thereof, or which hereafter shall in any way belong, relate or be appurtenant thereto, whether now owned or hereafter acquired by the Grantor. (e) All leases affecting the Mortgaged Property or any part thereof and all income, rents and issues of the Mortgaged Property and the Improvements now or hereafter located thereon from time to time accruing (including without limitation all payments under leases or tenancies, proceeds of insurance, condemnation payments, tenant security deposits whether held by the Grantor or in a trust account, and escrow funds), and all the estate, right, title, interest, property, possession, claim and demand whatsoever at law, as well as in equity, of the Grantor of, in and to the same; reserving only the right to the Grantor to collect and apply the same (other than insurance proceeds and condemnation payments) so long as the Grantor is not in Default hereunder. TO HAVE AND TO HOLD, the Mortgaged Property unto the Trustee, its heirs, successors and assigns, in fee simple forever, upon the trusts, terms and conditions and for the uses and purposes hereinafter set out; And the Grantor covenants with the Trustee that the Grantor is lawfully seized of the Mortgaged Property in fee simple and has the right to convey the same in fee simple; that, except for Permitted Encumbrances (as defined in Exhibit “B” attached hereto and incorporated herein by reference), the same HCBOC 031725 Pg. 154 4 are free and clear of all encumbrances, and that the Grantor will warrant and defend the title to the same against the claims of all persons whomsoever arising by, under or through the Grantor. THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST, that if the Grantor shall pay the Indebtedness in accordance with the terms of the Contract, together with interest thereon, and any renewals or extensions thereof in whole or in part, and shall comply with all the covenants, terms and conditions of this Deed of Trust, then this conveyance shall be null and void and may be canceled of record at the request and at the cost of the Grantor. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, the Grantor hereby further covenants and agrees as follows: ARTICLE I 1.01 Payment of Indebtedness. The Grantor will pay the Indebtedness and all other sums now or hereafter secured hereby promptly as the same shall become due. 1.02 Taxes, Liens and Other Charges. The Grantor will comply with the terms of the Contract in all matters relating to taxes, liens and other charges. 1.03 Insurance. The Grantor shall comply with the terms of the Contract in all matters relating to insurance. 1.04 Condemnation. The Grantor shall comply with the terms of the Contract in all matters relating to condemnation. 1.05 Care of Mortgaged Property. The Grantor shall comply with the Contract in all matters relating to the care of Mortgaged Property. 1.06 Leases and Other Agreements Affecting Mortgaged Property. The Grantor will duly and punctually perform all terms, covenants, conditions and agreements binding upon it under any lease or any other agreement of any nature whatsoever which involves or affects the Mortgaged Property or any part thereof. The Grantor will, at the request of the Beneficiary, furnish the Beneficiary with executed copies of all leases now or hereafter created upon the Mortgaged Property or any part thereof. 1.07 Security Agreement and Fixture Filing. With respect to the Fixtures, this Deed of Trust is hereby made and declared to be a security agreement in favor of the Beneficiary encumbering each and every item of such property included herein as a part of the Mortgaged Property, in compliance with the provisions of the Uniform Commercial Code as enacted in the State of North Carolina (the “UCC”), and the Grantor hereby grants a security interest to the Beneficiary in and to all of such Fixtures. This Deed of Trust shall constitute a financing statement filed as a fixture filing in accordance with N.C. Gen. Stat. §25- 9-502 (or any amendment thereto). For purposes of complying with the requirements of N.C. Gen. Stat. §25-9-502, the name of the Grantor, as Debtor, and the Beneficiary, as Secured Party, and the respective addresses of the Grantor, as Debtor, and the Beneficiary, as Secured Party, are set forth on the first page of this Deed of Trust. the Grantor authorizes the Beneficiary to effect any filing or recording of any additional financing statements relating to the Fixtures or amendments thereto where appropriate to perfect and continue the security interest in, and to protect and preserve, the Fixtures. Subject to Article XIV of the Contract and the limitations on the remedies in Article XII of the Contract, the remedies for any violation of the covenants, terms and conditions of the security agreement contained in this Deed of Trust shall be (1) as prescribed herein, or (2) as prescribed by general law, or (3) as prescribed by the specific statutory consequences now or hereafter enacted and specified in the UCC, all at the Beneficiary’s sole election. The HCBOC 031725 Pg. 155 5 mention in any such financing statement or statements of the rights in and to (1) the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for loss of value, or (3) the Grantor’s interest as lessor in any present or future lease or rights to rents, issues or awards growing out of the use and/or occupancy of the Mortgaged Property, whether pursuant to lease or otherwise, shall not in any way alter any of the rights of the Beneficiary as determined by this Deed of Trust or affect the priority of the Beneficiary’s security interest granted hereby or by any other recorded document, it being understood and agreed that such mention in such financing statement or statements is solely for the protection of the Beneficiary in the event any court shall at any time hold with respect to the foregoing clauses (1), (2) or (3) of this sentence, that notice of the Beneficiary’s priority of interest, to be effective against a particular class of persons, must be filed in the UCC records. 1.08 Further Assurances; After Acquired Property. At any time, and from time to time, upon request by the Beneficiary, the Grantor will make, execute and deliver or cause to be made, executed and delivered, to the Beneficiary and/or Trustee and, where appropriate and on request of the Trustee or the Beneficiary, cause to be recorded and/or filed and from time to time thereafter to be re-recorded and/or refiled at such time and in such offices and places as shall be deemed desirable by the Beneficiary, any and all such other and further deeds of trust, security agreements, financing statements, continuation statements, instruments of further assurance, certificates and other documents as may, in the opinion of the Beneficiary, be necessary or desirable to effectuate, complete, or perfect, or to continue and preserve (a) the obligations of the Grantor under the Contract or this Deed of Trust and (b) the lien of this Deed of Trust as a first and prior lien, subject to Permitted Encumbrances, upon and security title in and to all of the Mortgaged Property, whether now owned or hereafter acquired by the Grantor. Upon any failure by the Grantor so to do, the Beneficiary may make, execute, record, file, re-record and/or refile any and all such deeds of trust, security agreements, financing statements, continuation statements, instruments, certificates, and documents for and in the name of the Grantor and the Grantor hereby irrevocably appoints the Beneficiary as its agent and attorney-in-fact to do so. 1.09 Expenses. To the extent permitted by applicable law and Article XIV of the Contract, the Grantor will pay or reimburse the Beneficiary and the Trustee, upon demand therefor, for all reasonable attorneys’ fees, costs and expenses actually incurred by the Beneficiary and the Trustee in any suit, action, legal proceeding or dispute of any kind in which the Beneficiary and/or the Trustee is made a party or appears as party plaintiff or defendant, affecting the Indebtedness secured hereby, this Deed of Trust or the interest created herein, or the Mortgaged Property, including, but not limited to, the exercise of the power of sale contained in this Deed of Trust, any condemnation action involving the Mortgaged Property or any action to protect the security hereof, but excepting therefrom any negligence or misconduct by the Beneficiary or any breach of this Deed of Trust by the Beneficiary; and all such amounts paid by the Beneficiary shall be added to the Indebtedness. 1.10 Limit of Validity. If from any circumstances whatsoever fulfillment of any provision of this Deed of Trust or the Contract at the time performance of such provision shall be due, shall involve transcending the limit of validity presently prescribed by any applicable usury statute or any other applicable law, with regard to obligations of like character and amount, then ipso facto the obligation to be fulfilled shall be reduced to the limit of such validity, so that in no event shall any exaction be possible under this Deed of Trust or the Contract that is in excess of the current limit of such validity, but such obligation shall be fulfilled to the limit of such validity. 1.11 Use and Management of the Mortgaged Property. Unless required by applicable law, the Grantor shall not materially alter or change the use of the Mortgaged Property or abandon the Mortgaged Property without the prior written consent of the Beneficiary which shall not be unreasonably withheld; provided, however, that nothing contained in this Section 1.11 or elsewhere in the Deed of Trust shall be deemed or construed so as to in any way estop, limit or impair the Grantor from exercising or performing HCBOC 031725 Pg. 156 6 any regulatory, policing, legislative, governmental or other powers or functions of a political subdivision pursuant to applicable law. This provision will not be construed to restrict replacement or substitution of any property in violation of N.C. Gen. Stat. Section 160A-20(d). 1.12 Acquisition of Collateral. The Grantor shall not acquire any portion of the Fixtures, if any, covered by this Deed of Trust, subject to any security interest, conditional sales contract, title retention arrangement or other charge or lien taking precedence over the security title and lien of this Deed of Trust without the prior written consent of the Beneficiary (which consent will not be unreasonably withheld or delayed). 1.13 Hazardous Material. (a) The Grantor represents, warrants and agrees that, except as previously disclosed to the Corporation in writing, (1) the Grantor has not used or installed any Hazardous Material on or in the Mortgaged Property in material violation of applicable Environmental Laws, and to the Grantor's actual knowledge no other person has used or installed any Hazardous Material on or in the Mortgaged Property in material violation of applicable Environmental Laws; (2) to the Grantor's actual knowledge: (A) the Mortgaged Property is presently in material compliance with all applicable Environmental Laws, and (B) there is not now pending or threatened any action, suit, investigation or proceeding against the Grantor or the Mortgaged Property (or against any other party relating to the Mortgaged Property) seeking to enforce any right or remedy against the Grantor or the Mortgaged Property under any of the Environmental Laws; (3) the Grantor shall not use the Mortgaged Property to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce, or process (collectively “Handle”) Hazardous Materials other than the Handling of materials in the ordinary course of the Grantor's business as of the date hereof and in material compliance with Environmental Laws; (4) the Grantor shall not cause a Release of Hazardous Materials unto or from the Mortgaged Property in material violation of Environmental Laws; (5) the Grantor shall comply with Environmental Laws applicable to the Mortgaged Property in all material respects; (6) the Grantor has obtained and will at all times continue to obtain and/or maintain all licenses, permits and/or other governmental or regulatory actions necessary for the Mortgaged Property to comply with applicable Environmental Laws in all material respects (the “Permits”) and the Grantor will be and at all times remain in material compliance with the terms and provisions of the Permits; (7) to the Grantor's actual knowledge there has been no Release of any Hazardous Materials on or from the Mortgaged Property in violation of applicable Environmental Laws, whether or not such Release emanated from the Mortgaged Property or any contiguous real estate, which Release has not been, or is not being, addressed to the extent required by the governmental agency exercising jurisdiction over the Release pursuant to applicable Environmental Laws; (8) the Grantor shall give the Beneficiary prompt oral and written notice in the event that the Grantor receives any written notice from any governmental agency, entity, or any other party with regard to the presence of Hazardous Materials on, from or affecting the Mortgaged Property in material violation of applicable Environmental Laws; and (9) if a Release of Hazardous Materials is discovered in, on or under the Mortgaged Property in violation of applicable Environmental Laws, the Grantor shall complete all Response Actions (as defined below) required of the Grantor by a governmental agency exercising jurisdiction over such Release to the extent necessary to comply with applicable Environmental Laws. The Grantor shall have the right to conduct and control such Response Actions as provided in Subsection 1.13(e), below. (b) To the extent permitted by applicable law and Article XIV of the Contract, the Grantor hereby agrees to indemnify the Beneficiary, the Bond Trustee, and Trustee (collectively the “Indemnitees”) and hold the Indemnitees harmless from and against any and all liens, demands, defenses, suits, proceedings, disbursements, liabilities, losses, litigation, damages, judgments, obligations, penalties, injuries, costs, expenses (including, without limitation, reasonable attorneys' and experts' fees, costs, and expenses) (collectively “Claims”) paid, incurred or suffered by an Indemnitee as a result of a Claim by a HCBOC 031725 Pg. 157 7 third party asserted against such Indemnitee and arising out of: (1) the presence of Hazardous Materials in, on or under the Mortgaged Property, or the Release on or from the Mortgaged Property of any Hazardous Materials; (2) the violation of any Environmental Laws applicable to the Mortgaged Property or the Grantor; (3) the failure by the Grantor to comply fully with the terms and provisions of this Section 1.13 ; (4) the violation of any of the Environmental Laws in connection with any other property owned by the Grantor, which violation gives rise to rights in any party with respect to the Mortgaged Property by virtue of any of applicable Environmental Laws; or (5) any warranty or representation made by the Grantor in paragraph (a) of Section 1.13 being false or untrue in any material respect. The Indemnitees shall provide the Grantor with prompt notice of any Claim which may be subject to this Section 1.13(b), and the Grantor shall thereafter have the right, but not the obligation, to conduct and control the defense of such Claim at its expense, including without limitation the right to select counsel of its choosing. The indemnities provided herein shall survive the termination of this Deed of Trust or the sooner resignation or removal of the Trustee, or the Bond Trustee pursuant to the Indenture, and shall inure to the benefit of any such successors and assigns. (c) In the event the Beneficiary has a reasonable basis to suspect that the Grantor has violated any of the covenants, warranties or representations contained in this Section 1.13, or that the Mortgaged Property is not in material compliance with applicable Environmental Laws, the Grantor shall, after written notice from the Beneficiary, take such steps as are reasonably necessary to confirm or deny such occurrences, which steps may include, if necessary and without limitation, the preparation of environmental studies, surveys or reports. If such steps confirm a material violation of applicable Environmental Laws concerning the Mortgaged Property, the parties shall have the rights provided in Section 1.13(f), below. (d) For purposes of this Deed of Trust: (1) “Hazardous Material” or “Hazardous Materials” means (a) hazardous waste, as defined in RCRA, or in any analogous state or local law or regulation, (b) hazardous substances, as defined in CERCLA, or in any analogous state or local law or regulation, (c) toxic substances, as defined in TSCA, or (d) insecticides, fungicides or rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, as each such Act, statute or regulation is currently in effect and as they may be amended from time to time; (2) “Release” has the meaning given in Section 101(22) of CERCLA; (3) “Response Action” means action to implement a “response” as that term is defined in Section 104(25) of CERCLA; and (4) “Environmental Law” or “Environmental Laws” means any “Super Fund” or “Super Lien” law, or any other federal, state or local statute, law, ordinance or code, regulating or imposing liability concerning Hazardous Materials as are now or in the future be legally in effect, including, without limitation, the following, and all regulations promulgated and officially adopted thereunder or in connection therewith: the Super Fund Amendments and Reauthorization Act of 1986 (“SARA”); the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”); the Clean Air Act (“CAA”); the Clean Water Act (“CWA”); the Toxic Substance Control Act (“TSCA”); the Solid Waste Disposal Act (“SWDA”), as amended by the Resource Conservation and Recovery Act (“RCRA”); the Hazardous Waste Management System; and the Occupational Safety and Health Act of 1970 (“OSHA”). (e) To the extent permitted by applicable law and subject to Article XIV of the Contract, the obligations and liabilities of the Grantor under this Section 1.13 which arise out of events or actions occurring prior to the satisfaction of this Deed of Trust shall survive the exercise of the power of sale under HCBOC 031725 Pg. 158 8 or foreclosure of this Deed of Trust, the delivery of a deed in lieu of foreclosure of this Deed of Trust, the cancellation or release of record of this Deed of Trust and/or the payment in full of the Indebtedness. (f) Any matter or event under this Section 1.13 which may be deemed to be a default under this Deed of Trust shall not be a default until the Beneficiary has notified the Grantor of such matter or event in writing, and provided the Grantor with such grace period as specified in the Contract for the cure of such default. Further, with respect to any alleged default, the Grantor shall have the right to conduct and control the remedy of any alleged default, including without limitation the right to avail itself of any defense or response to any notice, demand, claim or other facts or circumstances underlying the alleged default. Without limiting the foregoing, the Grantor shall have the right to conduct and control Response Actions, hire consultants and counsel of its choosing, negotiate with governmental agencies and select remedial options and goals (which options and goals may including, without limitation, risk-based remedies). If a governmental agency is exercising jurisdiction over the matter, the Grantor shall perform the actions required by this subsection in a manner and timeframe consistent with the directives of such agency. In the event that the Grantor refuses to cure the default as described in this subsection, the Beneficiary, after written notice to the Grantor, may take such actions as are required by applicable Environmental Laws and, if applicable, the governmental agency exercising jurisdiction over the matter, to bring the Mortgaged Property into compliance with Environmental Laws. The reasonable cost and expenses of such actions taken by the Beneficiary, including without limitation the Beneficiary’s reasonable consultant, expert and attorneys' fees, costs, and expenses, shall be added to the Indebtedness. 1.14 Release of Mortgaged Property. Notwithstanding any other provisions of this Deed of Trust, so long as there is no Event of Default, the Trustee must release the Mortgaged Property or any part thereof from the lien and security interest of this Deed of Trust when and if the following requirements have been fulfilled: (a) In connection with any release of the Mortgaged Property, or any part thereof, there shall be filed with the Beneficiary a certified copy of the resolution of the Board of Commissioners for the Grantor stating the purpose for which the Grantor desires such release of the Mortgaged Property, giving an adequate legal description of the part of the Mortgaged Property to be released, requesting such release and providing for the payment by the Grantor of all expenses in connection with such release. (b) In connection with the release of any part of the Mortgaged Property constituting less than the entire Mortgaged Property, either (1) the tax, insured or appraised value of the Mortgaged Property remaining after the proposed release is not less than [25%] of the aggregate principal component of the Installment Payments related to the Bonds then Outstanding under the Indenture, or (2) the Grantor (i) provides for the substitution of other real property therefor and the tax, insured or appraised value of the Mortgaged Property remaining after the proposed substitution is not less than the replacement value of the Mortgaged Property (as determined above) immediately before the proposed substitution, (ii) delivers to the Trustee and the Corporation, or its assignee, an opinion of Bond Counsel to the effect that the substitution (A) is permitted by law and under this Deed of Trust and (B) will not adversely affect the tax treatment of any Outstanding Bonds (as defined in the Indenture), and (iii) records a modification to this Deed of Trust reflecting such substitution of the Mortgaged Property. (c) In connection with the release of any part of the Mortgaged Property constituting less than the entire Mortgaged Property, such release shall not prohibit the Grantor’s ingress, egress and regress to and from the remainder of the Mortgaged Property not being released, or materially interfere with the use of the remainder of the Mortgaged Property not being released. HCBOC 031725 Pg. 159 9 (d) In connection with the release of all property constituting the entire Mortgaged Property, there is paid to the Beneficiary an amount sufficient to provide for the payment in full of all Outstanding Bonds in accordance with Article VI of the Indenture. 1.15 Grant and Release of Easements. Notwithstanding any other provisions of this Deed of Trust, at any time so long as there is no Event of Default, the Grantor may at any time or times grant easements, licenses, rights of way and other rights and privileges in the nature of easements with respect to any part of the Mortgaged Property and the Grantor may release existing interests, easements, licenses, rights of way and other rights or privileges with or without consideration. The Beneficiary agrees that it shall execute and deliver and will cause, request or direct the Trustee to execute and deliver any instrument reasonably necessary or appropriate to grant or release any such interest, easement, license, right of way or other right or privilege but only upon receipt of (a) a copy of the instrument of grant or release, (b) a written request of the Grantor requesting such instrument and (c) a certificate executed by the Grantor that the grant or release is not detrimental to the proper conduct of the operations of the Grantor at the Mortgaged Property and will not impair the effective use, nor materially decrease the value, of the Mortgaged Property. 1.16 Release of Fixtures. Notwithstanding any other provisions of this Deed of Trust, at any time so long as there is no Event of Default, the Grantor may at any time or times release Fixtures to be added to the Mortgaged Property from the security interest created hereby with or without consideration. The Beneficiary agrees that it shall execute and deliver and will cause, request or direct the Trustee to execute and deliver any instrument reasonably necessary or appropriate to release any such Fixture but only upon receipt of (a) a copy of the instrument of release, (b) a written request of the Grantor requesting such instrument and (c) a certificate executed by the Grantor that the release is not detrimental to the proper conduct of the operations of the Grantor at the Mortgaged Property and will not impair the effective use, nor materially decrease the value, of the Mortgaged Property. ARTICLE II 2.01 Events of Default. The terms “Default”, “Event of Default” or “Events of Default”, wherever used in this Deed of Trust, shall mean any one or more of the following events: (a) The occurrence of any “Event of Default” under the Contract; or (b) Failure by the Grantor to perform or observe any term, condition or covenant of this Deed of Trust on its part to be observed or performed, other than as referred to in (a) above, or breach of any warranty by the Grantor herein contained, for a period of 30 days after written notice specifying such failure and requesting that it be remedied has been given to the Grantor by the Trustee or the Beneficiary unless the Trustee or the Beneficiary agrees in writing to an extension of such time before its expiration; provided, however, that if the failure cannot be corrected within the stated period, the Trustee or the Beneficiary will not unreasonably withhold consent for an extension. 2.02 Acceleration upon Default; Additional Remedies. In the event an Event of Default shall have occurred and is continuing, the Beneficiary shall, at the written direction of a majority in aggregate principal amount of the Owners of the Outstanding Bonds, declare all Indebtedness to be due and payable and the same shall thereupon become due and payable in accordance with the Contract and this Deed of Trust without any presentment, demand, protest or notice of any kind. Thereafter, the Beneficiary may, to the extent permitted by applicable law and subject to Article XIV of the Contract: (a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of its security, enter upon HCBOC 031725 Pg. 160 10 and take possession of the Mortgaged Property, or any part thereof, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the Mortgaged Property, or part thereof or interest therein, increase the income therefrom or protect the security hereof, and, with or without taking possession of the Mortgaged Property, sue for or otherwise collect the rents and issues thereof, including those rents and issues past due and unpaid, and apply the same, less costs and expenses of operation and collection including attorney’s fees, upon any Indebtedness, all in such order as the Beneficiary may determine. The entering upon and taking possession of the Mortgaged Property, the collection of such rents and issues and the application thereof as aforesaid shall not cure or waive any Event of Default or notice of Event of Default hereunder or invalidate any act done in response to such Default or pursuant to such notice of Default, and, notwithstanding the continuance in possession of the Mortgaged Property or the collection, receipt and application of rents and issues, the Trustee or the Beneficiary, to the extent permitted by applicable law and subject to Article XIV of the Contract, shall be entitled to exercise every right provided for in any instrument securing or relating to the Indebtedness or by law upon occurrence of any Event of Default, including the right to exercise the power of sale; (b) Commence an action to foreclose this Deed of Trust as a mortgage, specially enforce any of the covenants hereof, or cause the Trustee to foreclose this Deed of Trust by power of sale; and (c) To the extent permitted by applicable law and subject to Article XIV of the Contract, exercise any or all of the remedies available to a secured party under the UCC or under any other applicable laws. NOTWITHSTANDING ANY PROVISIONS HEREIN, IT IS THE INTENT OF THE PARTIES TO COMPLY WITH THE PROVISIONS OF NORTH CAROLINA GENERAL STATUTES SECTION 160A-20. NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE GRANTOR IN FAVOR OF THE BENEFICIARY IN VIOLATION OF SECTION 160A-20, INCLUDING, WITHOUT LIMITATION, ANY DEFICIENCY JUDGMENT FOR AMOUNTS THAT MAY BE OWED UNDER THE CONTRACT OR THIS DEED OF TRUST WHEN THE SALE OF ALL OR ANY PORTION OF THE MORTGAGED PROPERTY IS INSUFFICIENT TO PRODUCE ENOUGH MONEY TO PAY IN FULL ALL REMAINING OBLIGATIONS UNDER THE CONTRACT OR THIS DEED OF TRUST. TO THE EXTENT OF ANY CONFLICT BETWEEN THIS PARAGRAPH AND ANY OTHER PROVISION OF THIS DEED OF TRUST, THIS PARAGRAPH SHALL TAKE PRIORITY AND SHALL INCORPORATE HEREIN BY REFERENCE ARTICLE XIV OF THE CONTRACT. NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN THIS DEED OF TRUST, NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE GRANTOR IN ANY ACTION TO COLLECT ANY OF THE INDEBTEDNESS SECURED BY THIS DEED OF TRUST AND THE TAXING POWER OF THE GRANTOR IS NOT AND MAY NOT BE PLEDGED DIRECTLY OR INDIRECTLY OR CONTINGENTLY TO SECURE ANY MONEY DUE OR SECURED UNDER THIS DEED OF TRUST. 2.03 Foreclosure by Power of Sale. Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall notify the Trustee and shall deposit with the Trustee this Deed of Trust and such receipts and evidence of expenditures made and secured hereby as the Trustee may require. Upon application of the Beneficiary, it shall be lawful for and the duty of the Trustee, and the Trustee is hereby authorized and empowered, to expose to sale and to sell the Mortgaged Property at public auction for cash, after having first complied with all applicable requirements of North Carolina law with respect to the exercise of powers of sale contained in deeds of trust, and, upon such sale, the Trustee shall convey title to the purchaser in fee simple. After retaining from the proceeds of such sale just compensation for the Trustee’s services and all expenses incurred by the Trustee, including a reasonable trustee’s HCBOC 031725 Pg. 161 11 commission not exceeding one-half of one percent (0.5%) of the bid and reasonable attorneys’ fees, costs, and expenses for legal services actually performed, the Trustee shall apply the residue of the proceeds, first, to the payment of all sums expended by the Beneficiary under the terms of this Deed of Trust, second, to the payment of the Indebtedness and interest thereon secured hereby, and the balance, if any, shall be paid to the Grantor. The Grantor agrees that in the event of sale hereunder, the Beneficiary shall have the right to bid thereat. The Trustee may require the successful bidder at any sale to deposit immediately with the Trustee cash or certified check in an amount not to exceed twenty-five percent (25%) of the bid, provided notice of such requirement is contained in the advertisement of the sale. The bid may be rejected if the deposit is not immediately made and thereupon the Trustee shall at the same time and place again offer the Mortgaged Property for sale. Such deposit shall be refunded in case a resale is had; otherwise, it shall be applied to the purchase price. 2.04 Performance by the Beneficiary on Defaults by the Grantor. If the Grantor shall Default in the payment, performance or observance of any term, covenant or condition of this Deed of Trust, the Beneficiary may, at its option, pay, perform or observe the same, and all payments made or costs or expenses incurred by the Beneficiary in connection therewith shall be secured hereby and shall be, without demand, immediately repaid by the Grantor to the Beneficiary with interest thereon at the rate provided in the Contract. The Beneficiary shall be the sole judge of the necessity for any such actions and of the amounts to be paid. The Beneficiary is hereby empowered to enter and to authorize others to enter upon the Mortgaged Property or any part thereof for the purpose of performing or observing any such defaulted term, covenant or condition without thereby becoming liable to the Grantor or any person in possession holding under the Grantor. 2.05 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws. The Grantor agrees to the full extent permitted by law, that in case of a Default hereunder, neither the Grantor nor anyone claiming through or under it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension, exemption or redemption laws now or hereafter in force, to prevent or hinder the enforcement or foreclosure of this Deed of Trust, or the absolute sale of the Mortgaged Property, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereat, and the Grantor, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may lawfully so do, the benefit of all such laws and any and all right to have the assets comprised in the security intended to be created hereby marshaled upon any foreclosure of the lien hereof. 2.06 Leases. The Beneficiary and the Trustee, or either of them, at their option and to the extent permitted by law, are authorized to foreclose this Deed of Trust subject to the rights of any tenants of the Mortgaged Property, and the failure to make any such tenants parties to any such foreclosure proceedings and to foreclose their rights will not be, nor be asserted to be by the Grantor, a defense to any proceedings instituted by the Beneficiary and the Trustee to collect the sums secured hereby. 2.07 Discontinuance of Proceedings and Restoration of the Parties. In case the Beneficiary and the Trustee, or either of them, shall have proceeded to enforce any right, power or remedy under this Deed of Trust by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Beneficiary and the Trustee, or either of them, then and in every such case the Grantor, the Beneficiary, and the Trustee, and each of them, shall be restored to their former positions and rights hereunder, and all rights, powers and remedies of the Beneficiary and the Trustee, and each of them, shall continue as if no such proceeding had been taken. 2.08 Remedies Not Exclusive. To the extent permitted by applicable law and subject to Article XIV of the Contract, the Trustee and the Beneficiary, and each of them, shall be entitled to enforce payment and performance of any Indebtedness or obligations secured hereby and to exercise all rights and powers under this Deed of Trust or any other agreement securing or relating to the Indebtedness secured HCBOC 031725 Pg. 162 12 hereby or any laws now or hereafter in force, notwithstanding some of the Indebtedness and obligations secured hereby may now or hereafter be otherwise secured, whether by mortgage, deed of trust, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement, whether by court action or pursuant to the power of sale or other powers herein contained, shall prejudice or in any manner affect the Trustee’s or the Beneficiary’s right to realize upon or enforce any other security now or hereafter held by the Trustee or the Beneficiary, it being agreed that the Trustee and the Beneficiary, and each of them, shall be entitled to enforce this Deed of Trust and any other security now or hereafter held by the Beneficiary or the Trustee in such order and manner as they or either of them may in their absolute discretion determine. No remedy herein conferred upon or reserved to the Trustee or the Beneficiary is intended to be exclusive of any other remedy herein or by law provided or preclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any instrument securing or relating to the Indebtedness secured hereby to the Trustee or the Beneficiary, or to which either of them may be otherwise entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by the Trustee or the Beneficiary and either of them may pursue inconsistent remedies. 2.09 Waiver. No delay or omission of the Beneficiary or the Trustee to exercise any right, power or remedy accruing upon any Default shall exhaust or impair any such right, power or remedy or shall be construed to be a waiver of any such Default, or acquiescence therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary and the Trustee, and each of them, may be exercised from time to time and as often as may be deemed expedient by the Beneficiary and the Trustee, and each of them. No consent or waiver, expressed or implied, by the Beneficiary to or of any breach or Default by the Grantor in the performance of the obligations thereof hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or Default in the performance of the same or any other obligations of the Grantor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary of its rights hereunder or impair any rights, powers or remedies consequent on any breach or Default by the Grantor. 2.10 Suits to Protect the Mortgaged Property. The Beneficiary and the Trustee, and each of them, shall have the power (a) to institute and maintain such suits and proceedings as they may deem expedient to prevent any impairment of the Mortgaged Property by any acts which may be unlawful or in violation of this Deed of Trust, with notice of commencement of such suits and proceedings to be given to the Grantor, (b) to preserve or protect their interest in the Mortgaged Property and in the rents and issues arising therefrom and (c) to restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment, rule or order would impair the security hereunder or be prejudicial to the interest of the Beneficiary. 2.11 Beneficiary May File Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Grantor, its creditors or its property, the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable to have the claims of the Beneficiary allowed in such proceedings for the entire amount due and payable by the Grantor under this Deed of Trust at the date of the institution of such proceedings and for any additional amount which may become due and payable by the Grantor hereunder after such date. HCBOC 031725 Pg. 163 13 ARTICLE III 3.01 Successors and Assigns. This Deed of Trust shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, legal representatives, successors and assigns. Whenever a reference is made in this Deed of Trust to the Grantor, Trustee or the Beneficiary such reference shall be deemed to include a reference to the heirs, executors, legal representatives, successors and assigns of the Grantor, the Trustee or the Beneficiary, respectively. 3.02 Terminology. All personal pronouns used in this Deed of Trust whether used in the masculine, feminine or neuter gender, shall include all other genders; the singular shall include the plural, and vice versa. Titles and Articles are for convenience only and neither limit nor amplify the provisions of this Deed of Trust itself, and all references herein to Articles, Sections or subsections thereof, shall refer to the corresponding Articles, Sections or subsections thereof, of this Deed of Trust unless specific reference is made to such Articles, Sections or subsections thereof of another document or instrument. 3.03 Severability. If any provision of this Deed of Trust or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, then, subject to applicable law and Article XIV of the Contract, the remainder of this Deed of Trust and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 3.04 Applicable Law and Jurisdiction. This Deed of Trust shall be interpreted, construed and enforced according to the laws of the State of North Carolina, without regard to conflict of law principles. The exclusive forum and venue for all actions arising out of this Deed of Trust are with the North Carolina General Court of Justice in Harnett County, North Carolina or the U.S. District Court for the Eastern District of North Carolina. Any attempt to contravene this Section shall be an express violation of this Deed of Trust. 3.05 Notices, Demands and Request. All notices, demands or requests provided for or permitted to be given pursuant to this Deed of Trust must be in writing and shall be deemed to have been properly given or served by personal delivery or by depositing in the United States Mail, prepaid and registered or certified, return receipt requested, and addressed to the addresses set forth in the Contract or by Electronic Means (as defined in the Indenture). All notices, demands and requests shall be effective upon delivery or upon being deposited in the United States Mail. However, the time period in which a response to any notice, demand or request must be given, if any, shall commence to run from the date of receipt of the notice, demand or request by the addressee thereof. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice, demand or request sent. By giving at least thirty (30) days written notice thereof, the Grantor, the Trustee or the Beneficiary shall have the right from time to time and at any time during the term of this Deed of Trust to change their respective addresses and each shall have the right to specify as its address any other address within the United States of America. 3.06 Appointment of Successor Trustee. The Beneficiary shall at any time have the irrevocable right to remove Trustee herein named without notice to such Trustee for cause and to appoint a successor thereto by an instrument in writing, duly acknowledged, in such form as to entitle such written instrument to be recorded in the State of North Carolina, and in the event of the death or resignation of Trustee named herein, the Beneficiary shall have the right to appoint a successor thereto by such written instrument, and any Trustee so appointed shall be vested with the title to the Mortgaged Property and shall possess all the powers, duties and obligations herein conferred on Trustee in the same manner and to the same extent as though such were named herein as Trustee. In the event of such substitution of the Trustee, the Beneficiary shall furnish notice thereof to the Grantor. HCBOC 031725 Pg. 164 14 3.07 Trustee’s Powers. At any time, or from time to time, without liability therefor and without notice, upon written request of the Beneficiary and the Grantor and presentation of this Deed of Trust, and without affecting the liability for payment of the Indebtedness secured hereby or the effect of this Deed of Trust upon the remainder of said Mortgaged Property, the Trustee may (1) reconvey any part of said Mortgaged Property, (2) consent in writing to the making of any map or plat thereof, (3) join in granting any easement therein or (4) join in any extension agreement or any agreement subordinating the lien or charge hereof. This provision shall not limit the powers of Trustee under applicable law or Section 2.03 hereof. 3.08 Beneficiary’s Powers. Without affecting the liability for the payment of any obligation herein mentioned, and without affecting the lien or charge of this Deed of Trust upon any portion of the Mortgaged Property not then or theretofore released as security for the full amount of all unpaid obligations, the Beneficiary may, from time to time and without notice, (1) release any person so liable, (2) extend the maturity or alter any of the terms of any such obligation, (3) grant other indulgences, (4) cause to be released or reconveyed at any time at the Beneficiary’s option, any parcel, portion or all of the Mortgaged Property, (5) take or release any other or additional security for any obligation herein mentioned or (6) make compositions or other arrangements in relation thereto. The provisions of N.C. Gen. Stat. Section 45-45.1 or any similar statute hereafter enacted in replacement or in substitution thereof shall be inapplicable to this Deed of Trust. 3.09 Acceptance by Trustee. The Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made of public record as provided by law. 3.10 Miscellaneous. The covenants, terms and conditions herein contained shall bind, and the benefits and powers shall inure to, the respective heirs, executors, administrators, successors and assigns of the parties hereto. Whenever used herein, the singular number shall include the plural, the plural the singular, and the term “the Beneficiary” shall include any payee of the Indebtedness and any transferee or assignee thereof, whether by operation of law or otherwise. [SIGNATURES BEGIN ON FOLLOWING PAGE] HCBOC 031725 Pg. 165 SIGNATURE PAGE 1 IN WITNESS WHEREOF, the Grantor has caused this Deed of Trust to be executed under seal the day and year first above written. COUNTY OF HARNETT, NORTH CAROLINA [SEAL] By: Brent Trout County Manager ATTEST: Melissa Capps Clerk to the Board of Commissioners STATE OF NORTH CAROLINA ) ) COUNTY OF HARNETT ) I, a Notary Public of the County and State aforesaid, certify that MELISSA CAPPS (the “Signatory”) personally came before me this day and acknowledged that she is the Clerk to the Board of Commissioners of the County of Harnett, North Carolina (the “County”) and that by authority duly given and as the act of the County, the foregoing instrument was signed in its name by the County Manager of the County and attested by her as Clerk to the Board of Commissioners of the County. I certify that the Signatory personally appeared before me this day, and (check one of the following) ______(I have personal knowledge of the identity of the Signatory); or ______(I have seen satisfactory evidence of the Signatory’s identity, by a current state or federal identification with the Signatory’s photograph in the form of: (check one of the following) ___ a driver's license or ___ in the form of _______________________); or ______(a credible witness has sworn to the identity of the Signatory). The Signatory acknowledged to me that she voluntarily signed the foregoing document for the purpose stated therein and in the capacity indicated. WITNESS my hand and official stamp or seal, this the ______ day of April, 2025. Notary Public Print Name: [Note: Notary Public must sign exactly as on notary seal] My Commission Expires:  [NOTARY SEAL] (MUST BE FULLY LEGIBLE) HCBOC 031725 Pg. 166 A-1 EXHIBIT A REAL PROPERTY DESCRIPTION Flatwoods Middle School [___] HCBOC 031725 Pg. 167 B-1 EXHIBIT B PERMITTED ENCUMBRANCES “Permitted Encumbrances” means, as of any particular time: (a) this Deed of Trust and any mortgage, pledge, lien, charge, security interest, encumbrance or claim in favor of the Corporation that is subordinate to this Deed of Trust; (b) the Contract, as it may be amended from time to time, and any encumbrances with respect to the Mortgaged Property permitted therein; (c) the Indenture; (d) utility, access and other easements and rights of way, restrictions and exceptions which exist of record as of the closing date which do not interfere with or impair the intended use of the Mortgaged Property; (e) [the Lease Agreement, dated as of April 1, 2025, between the Harnett County Board of Education and the County, and any other leases, or any amendments, modifications or extensions thereto, as permitted under the Contract; (f) such minor defects, irregularities, encumbrances and clouds on title as normally exist with respect to property of the general character of the Mortgaged Property and as do not materially impair title to the Mortgaged Property; (g) leases, or any amendments, modifications or extensions thereto as permitted under the Contract; and (h) any other encumbrances described in [Schedule B-II to the Title Insurance Commitment Number _______ dated _____, 20__ issued by _____________________], which commitment is incorporated herein by this reference, pursuant to which such title insurance company will issue the title insurance policy as required by Section 5.5 of the Contract. HCBOC 031725 Pg. 168 Rebecca B. Joyner Partner Telephone: 919.835.4499 Direct Fax: 919.834.4564 rebeccajoyner@parkerpoe.com Atlanta, GA Charleston, SC Charlotte, NC Columbia, SC Greenville, SC Raleigh, NC Spartanburg, SC Washington, DC Parker Poe Adams & Bernstein LLP Attorneys and Counselors at Law PNC Plaza 301 Fayetteville Street Suite 1400 Raleigh, NC 27601 t 919.828.0564 f 919.834.4564 www.parkerpoe.com March 3, 2025 VIA E-MAIL Ms. Kimberly A. Honeycutt Finance Officer Harnett County, North Carolina Email: khoneycutt@harnett.org Harnett County, North Carolina Limited Obligation Bonds, Series 2025 Dear Kimberly: Thank you for asking Parker Poe Adams & Bernstein, LLP (the “Firm”) to serve as bond counsel and counsel to the financing corporation in connection with the Harnett County’s above-described limited obligation bonds (collectively, the “Bonds”). Scope of Engagement. Our understanding is that the County intends to issue the Bonds to finance (1) the construction, equipping, and furnishing of school facilities in the County (the “2025 Project”); and (2) finance the costs related to the execution and delivery of the Bonds. The Bonds will be publicly-offered by PNC Capital Markets and Robert W. Baird & Co. Incorporated, as underwriters (collectively, the “Underwriters”), and Davenport & Company, LLC is serving as the County’s financial advisor. As bond counsel, the Firm will provide legal services for the Bonds and an opinion as to the validity of the Bonds and the federal and state tax treatment of the interest on the Bonds, subject to usual and customary exceptions. As counsel to the financing corporation, the Firm will assist the County in setting up the corporation, coordinate corporation approval of the Bonds and provide an opinion on behalf of the corporation in connection with the closing. Specifically, our services as bond counsel and counsel to the corporation will include: 1. participation in meetings with County staff and financial advisor and, to the extent deemed necessary by the County staff, with the County Council, regarding the structuring and authorization of the Bonds; 2. preparation of the bond documents and related approvals relating to the authorization, execution and delivery of the Bonds; 3. preparation of all other papers required as a condition precedent to the execution and delivery of the Bonds; HCBOC 031725 Pg. 169 Ms. Kimberly A. Honeycutt March 3, 2025 Page 2 4. assistance to the County with respect to matters before the Local Government Commission; 5. working with the Underwriters and their counsel to satisfy the conditions of the underwriter for the sale and delivery of the Bonds; 6. reviewing the offering document and participating in meetings with the Underwriters and their counsel regarding the offering document; 7. as bond counsel, delivery of an opinion as to the validity of the Bonds and the federal and state tax treatment of the interest on the Bonds, subject to usual and customary exceptions; and 8. as counsel to the corporation, delivery of an opinion as required by the underwriter and the counsel as to the validity of the Bonds and the actions of the Corporation. The County will be represented by the County Attorney with respect to all material matters as between the Underwriters and the County. The Firm does not represent to any other party involved in this transaction with respect to the Bonds. The scope of the legal services that Parker Poe will provide may be expanded during the course of this engagement pursuant to communications establishing a specific mutual understanding of the services the Firm is to perform. Advance Waiver of Conflicts. We are making you aware that our Firm has represented, currently represents and expects to represent in the future, the Underwriter in matters unrelated to the Bonds. Because the County is represented in this transaction by the County Attorney, and the County Attorney shall serve as the County’s counsel with respect to all material matters and negotiations as between the Underwriter and the County, we do not consider our role as bond counsel to the County to create a conflict of interest. However, we are requesting that the County waive any potential conflict of interest that may arise. If any issues arise that we believe create a genuine conflict of interest, we will immediately inform you and work with the County Attorney to resolve the matter consistent with our ethical responsibilities. In addition, Parker Poe currently represents or expects to represent in the future clients in property tax appeals, zoning matters, easement matters and condemnation matters whose interests may be adverse to North Carolina local governments, including the County (“Adverse Matters”). Because Parker Poe’s representation of the County in connection with the issuance of the Bonds is unrelated to the Adverse Matters, we do not believe we will obtain any confidential information of the County that could be used to its disadvantage in the representation of other clients in the Adverse Matters. We are asking that the County waive any potential conflict of interest that may arise with respect to current or future representation of other clients in the Adverse Matters, and agree that it will not object to Parker Poe’s continued and future representation or seek to disqualify Parker Poe from representing other clients in continued or future Adverse Matters, as a result of our service as bond counsel to the County. Should Parker Poe be asked to handle a matter for a client that would be adverse to the County in a matter not covered by the above description of the Adverse Matters, or in a matter that involves the County as bond issuer, Parker Poe would immediately inform the County Attorney and seek to resolve the matter consistent with our ethical responsibilities. Staffing and Legal Fees. I will be the County’s primary contact for our Firm’s work on the Bonds with support from Carlos Manzano and our tax team, Mike Larsen and Molly McCabe. The firm will HCBOC 031725 Pg. 170 Ms. Kimberly A. Honeycutt March 3, 2025 Page 3 provide services as bond counsel for the Bonds for a fee of $85,000 and as counsel to the Corporation for a fee of $5,000. Standard Terms of Engagement. Additional information regarding fees and other important matters is set forth in the enclosed Standard Terms of Engagement, which are incorporated as part of this letter. Please review this letter and the Standard Terms of Engagement carefully. We sincerely appreciate the opportunity to serve as bond counsel for the Harnett County, as issuer, of the Bonds. If the provisions set forth above are consistent with your understanding, please sign below, keep a copy of the letter for yourself and return the original to us for our records. Sincerely, Rebecca B. Joyner Agreed to and accepted this _____ of March, 2025. HARNETT COUNTY, NORTH CAROLINA By: Title: cc: Carlos Manzano, Esq. HCBOC 031725 Pg. 171 PARKER POE ADAMS & BERNSTEIN LLP STANDARD TERMS OF ENGAGEMENT REGARDING LEGAL REPRESENTATION 1. Scope of Work and Limitations. The scope of our work and the limitations on the services to be performed will be in accordance with the Engagement Letter. 2. No Guaranteed or Contingent Outcome. While we will perform our professional services on behalf of the client to the best of our ability under the circumstances, we cannot and have not made any guarantees regarding the outcome of our professional efforts. Any expressions about the possible outcome of the matter or the results achievable are our best professional estimates only, and are limited by our knowledge at the time they are expressed. 3. Communications. As requested, we will send to the client copies of pertinent correspondence, documents and other materials prepared or received by us in the course of the representation. The client is encouraged to contact us as to any questions or comments regarding the services, fees, or status of the matter or as to any pertinent facts or considerations which may come to the attention of the client. Material information and documents received by the client should be forwarded to the firm without delay. 4. Attorney Assignment. Each client will have an attorney who shall have primary responsibility for the client's matters. When appropriate, work on the client's matters may be assigned to other attorneys in the firm who have a sufficient level of experience and time availability to handle competently and efficiently portions or all of the client's matters. In addition, assistance of non-attorney support personnel under the direct supervision of firm attorneys may be required, as appropriate. 5. Confidentiality. The firm will protect the confidence of the client and will not divulge confidential information concerning the client's business or legal matters, as required by the Rules of Professional Conduct. However, we understand that, unless you advise us to the contrary, you do not object to our mentioning to others our representation of you or our listing of your name as one of our clients in professional literature or in material published about this law firm. 6. Termination. The firm reserves the right to withdraw from representing the client upon written notice at any time, with or without cause. Likewise, the client may terminate the firm's services prospectively upon written notice to the firm. This engagement involve a transaction subject to a “bill at close” arrangement whereby client and the firm agree that legal fees and disbursements shall be paid from closing proceeds at the conclusion of the transaction. A “bill at close” arrangement is not the same as a contingency fee (where the firm receives payment only if a certain result is achieved). If the client terminates the firm’s services or elects not to consummate the financing, the firm and the client will mutually agree at that time on appropriate compensation based on the amount of time the firm has spent on the matter to that date. HCBOC 031725 Pg. 172 PARKER POE DRAFT 02/13/2025 HARNETT COUNTY PUBLIC FACILITIES CORPORATION and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION AS TRUSTEE INDENTURE OF TRUST Dated as of April 1, 2025 This instrument has been entered into by the within-described parties to secure certain Limited Obligation Bonds evidencing proportionate undivided interests in rights to receive certain revenues pursuant to an Installment Financing Contract between the Harnett County Public Facilities Corporation and the County of Harnett, North Carolina, as more fully described herein. HCBOC 031725 Pg. 173 i TABLE OF CONTENTS INDENTURE OF TRUST Page ARTICLE I DEFINITIONS AND INTERPRETATIONS ............................................................................... 3 Section 1.1 Definitions ......................................................................................................... 3 Section 1.2 Interpretations .................................................................................................... 6 ARTICLE II AUTHORIZATION, TERMS, ISSUANCE OF BONDS ............................................................. 9 Section 2.1 Authorized Amount of Bonds............................................................................. 9 Section 2.2 Issuance of Bonds .............................................................................................. 9 Section 2.3 Limited Obligation ........................................................................................... 11 Section 2.4 Execution of the Bonds .................................................................................... 11 Section 2.5 Authentication ................................................................................................. 11 Section 2.6 Form of 2025 Bonds ........................................................................................ 12 Section 2.7 Delivery of the 2025 Bonds .............................................................................. 12 Section 2.8 Mutilated, Lost, Stolen or Destroyed Bonds ..................................................... 12 Section 2.9 Registration of Bonds; Persons Treated as Owners; Transfer of Bonds ........................................................................................................... 12 Section 2.10 Cancellation of Bonds ...................................................................................... 13 Section 2.11 Additional Bonds ............................................................................................. 13 ARTICLE III REVENUES AND FUNDS ................................................................................................. 15 Section 3.1 Source of Payment of Bonds; Deposit of Bond Proceeds .................................. 15 Section 3.2 Creation of the Bond Fund ............................................................................... 15 Section 3.3 Payments Into the Interest Account of the Bond Fund ...................................... 15 Section 3.4 Payments Into the Principal Account of the Bond Fund .................................... 15 Section 3.5 Use of Money in the Bond Fund ....................................................................... 15 Section 3.6 Custody of the Bond Fund................................................................................ 16 Section 3.7 Creation of the Prepayment Fund ..................................................................... 16 Section 3.8 Nonpresentment of Bonds ................................................................................ 16 Section 3.9 Rebate Fund ..................................................................................................... 16 Section 3.10 Rebate Disbursements ...................................................................................... 16 Section 3.11 Creation of the Acquisition and Construction Fund .......................................... 17 Section 3.12 Money To Be Held in Trust; Reports to County ............................................... 17 Section 3.13 Repayment to the County from the Trustee....................................................... 17 Section 3.14 Custody of Separate Trust Fund ....................................................................... 18 ARTICLE IV PREPAYMENT OF BONDS............................................................................................... 19 Section 4.1 Prepayment Dates and Prices ........................................................................... 19 Section 4.2 Notice of Prepayment....................................................................................... 20 Section 4.3 Prepayments .................................................................................................... 21 Section 4.4 Cancellation ..................................................................................................... 21 Section 4.5 Delivery of New Bonds On Partial Prepayment of Bonds ................................. 21 Section 4.6 Purchase at Any Time ...................................................................................... 22 HCBOC 031725 Pg. 174 Page ii ARTICLE V INVESTMENTS ................................................................................................................. 23 ARTICLE VI DISCHARGE OF INDENTURE .......................................................................................... 25 ARTICLE VII DEFAULTS AND REMEDIES .......................................................................................... 27 Section 7.1 Events of Default ............................................................................................. 27 Section 7.2 Remedies on Default ........................................................................................ 27 Section 7.3 Majority of Owners May Control Proceedings.................................................. 28 Section 7.4 Rights and Remedies of Owners ....................................................................... 28 Section 7.5 Trustee May Enforce Rights Without Bonds .................................................... 29 Section 7.6 Delay or Omission No Waiver ......................................................................... 29 Section 7.7 No Waiver of One Default to Affect Another ................................................... 29 Section 7.8 Discontinuance of Proceedings on Default; Position of Parties Restored ....................................................................................................... 29 Section 7.9 Waivers of Events of Default ........................................................................... 29 Section 7.10 Application of Money ...................................................................................... 29 Section 7.11 Notice of Events of Default .............................................................................. 31 ARTICLE VIII CONCERNING THE TRUSTEE ...................................................................................... 32 Section 8.1 Duties of the Trustee ........................................................................................ 32 Section 8.2 Fees and Expenses of Trustee ........................................................................... 35 Section 8.3 Resignation or Replacement of Trustee ............................................................ 35 Section 8.4 Conversion, Consolidation or Merger of Trustee .............................................. 36 Section 8.5 Intervention by Trustee .................................................................................... 37 Section 8.6 E-Verify .......................................................................................................... 37 ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS OF THE CONTRACT ....................... 38 Section 9.1 Supplemental Indentures Not Requiring Consent of Owners ............................. 38 Section 9.2 Supplemental Indentures Requiring Consent of Owners ................................... 38 Section 9.3 Execution of Supplemental Indenture ............................................................... 39 Section 9.4 Amendments to the Contract or the Deed of Trust Not Requiring Consent of Owners ....................................................................................... 39 Section 9.5 Amendments to the Contract or the Deed of Trust Requiring Consent of Owners ....................................................................................... 40 Section 9.6 Consent of Initial Purchaser, Underwriters or Remarketing Agent .................... 40 ARTICLE X MISCELLANEOUS............................................................................................................ 41 Section 10.1 Evidence of Signature of Owners and Ownership of Bonds .............................. 41 Section 10.2 Covenants of Corporation ................................................................................ 41 Section 10.3 Inspection of the Mortgaged Property............................................................... 41 Section 10.4 Parties Interested Herein .................................................................................. 41 Section 10.5 Titles, Headings and Captions .......................................................................... 42 Section 10.6 Severability ...................................................................................................... 42 Section 10.7 Governing Law ................................................................................................ 42 Section 10.8 Execution in Counterparts, Electronic Signatures ............................................. 42 Section 10.9 Notices ............................................................................................................ 42 Section 10.10 Payments Due on Holidays .............................................................................. 43 Section 10.11 Corporation, County, and Trustee Representatives ........................................... 43 Section 10.12 USA Patriot Act ............................................................................................... 43 EXHIBIT A - FORM OF 2025 BONDS ................................................................................................. A-1 HCBOC 031725 Pg. 175 INDENTURE OF TRUST THIS INDENTURE OF TRUST dated as of April 1, 2025 (this “Indenture”), by and between the HARNETT COUNTY PUBLIC FACILITIES CORPORATION (the “Corporation”), a nonprofit corporation duly created, existing and in good standing under the laws of the State of North Carolina (the “State”), and U.S. BANK TRUST COMPANY , NATIONAL ASSOCIATION, as trustee (the “Trustee”), a national banking association duly organized and validly existing under the laws of the United States, having an office and place of business in Charlotte, North Carolina, being authorized to accept and execute trusts of the character herein set out. W I T N E S E T H : WHEREAS, the County of Harnett, North Carolina (the “County”) is a duly and regularly created, organized and existing political subdivision validly existing as such under and by virtue of the Constitution, statutes and laws of the State; WHEREAS, the County, to finance the construction, equipping, and furnishing of school facilities in the County, including, but not limited to, Flatwoods Middle School (the “2025 Project” and, initially, the “Projects”), has, under Section 160A-20 of the General Statutes of North Carolina, entered into an Installment Financing Contract dated as of April 1, 2025 (the “Contract”) with the Corporation under which it will make Installment Payments and Additional Payments in consideration thereof; WHEREAS , pursuant to this Indenture, the Corporation has assigned all of its right, title and interest in and to the Trust Estate (as defined below); WHEREAS, the Corporation proposes to execute and deliver limited obligation bonds (the “Bonds”), which evidence proportionate undivided interests in the rights to receive certain Revenues payable by the County under and pursuant to the Contract and shall be payable solely from the sources provided for in this Indenture; WHEREAS, pursuant to the Contract, the County will pay certain Installment Payments in consideration for the advancement by the Corporation of the Purchase Price under the Contract, which Installment Payments will be deposited by the Trustee in the funds and accounts established hereunder in accordance with the terms hereof and of the Contract; WHEREAS, the execution, delivery and performance of the Contract by the Corporation, and the assignment by the Corporation to the Trustee, pursuant to this Indenture, of the Trust Estate have been authorized, approved and directed by all necessary and appropriate action of the Corporation; WHEREAS, the Trustee has entered into this Indenture for and on behalf of the Owners, and will hold its rights hereunder, except as otherwise specifically provided herein, for the equal and proportionate benefit of the Owners, and will disburse money received by the Trustee in accordance with this Indenture; WHEREAS, the obligation of the County to make Installment Payments and Additional Payments under and pursuant to the Contract shall not constitute a pledge of the faith and credit of the County within the meaning of the Constitution of the State; WHEREAS, to further secure the obligations of the County under the Contract, the County will deliver a Deed of Trust, Security Agreement and Fixture Filing dated as of April 1, 2025 (the “Deed of Trust”) to the deed of trust trustee named therein for the benefit of the Corporation and its assignee; HCBOC 031725 Pg. 176 2 WHEREAS, no deficiency judgment may be rendered against the County in any action for its breach of the Contract, and the taxing power of the County is not and may not be pledged in any way directly or indirectly or contingently to secure any money due under the Contract; and WHEREAS, all things necessary to make the Bonds (as defined herein), when executed and delivered by the Corporation and authenticated by the Trustee as provided in this Indenture, legal, valid and binding proportionate interests in rights to receive certain Revenues pursuant to the Contract, as herein provided, and to constitute this Indenture a valid, binding and legal instrument for the security of the Bonds in accordance with its terms, have been done and performed; NOW, THEREFORE, THIS INDENTURE OF TRUST WITNESSETH: That the Corporation, in consideration of the premises and the mutual covenants herein contained and for the benefit of the Owners and the sum of One Dollar ($1.00) to it duly paid by the Trustee at or before the execution of these presents, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, to secure the payment of the principal, premium, if any, and interest with respect to all Bonds at any time outstanding under this Indenture, according to their tenor and effect, and to secure the performance and observance of all the covenants and conditions in the Bonds and herein contained, and to declare the terms and conditions on and subject to which the Bonds are executed and delivered and secured, has executed and delivered this Indenture and has granted, warranted, aliened, remised, released, conveyed, assigned, pledged, set over and confirmed, and by these presents does grant, warrant, alien, remise, release, convey, assign, sell, set over and confirm unto U.S. Bank Trust Company, National Association, as the Trustee, and to its successors and assigns forever, all and singular the following described property, franchises and income (collectively, the “Trust Estate”): (a) All rights, title and interest of the Corporation in the Contract, except its rights under Article X thereof, its rights to receive notices and those Additional Payments payable to the Corporation under the Contract; (b) All rights, title and interest of the Corporation in the Deed of Trust and the Mortgaged Property (as defined in the Contract); and (c) All money and securities from time to time held by the Trustee under this Indenture in any fund or account (except the Rebate Fund) and any and all other personal property of every name and nature from time to time hereafter by delivery or by writing of any kind specially, pledged or hypothecated, as and for additional security hereunder, by the Corporation, or by anyone on its behalf, in favor of the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof; TO HAVE AND TO HOLD the same with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended to be, to the Trustee and its successors in said trust and assigns forever; IN TRUST, NEVERTHELESS, on the terms herein set forth for itself and for the equal and proportionate benefit, security and protection of all Owners, without privilege, priority or distinction as to the lien or otherwise of any of the Bonds over any other of the Bonds; PROVIDED, HOWEVER, that if the principal with respect to the Bonds and the premium, if any, and the interest due or to become due with respect thereto, shall be paid at the times and in the manner mentioned in the Bonds according to the true intent and meaning thereof, and if there are paid to the Trustee all sums of money due or to become due to the Trustee in accordance with the terms and provisions hereof, HCBOC 031725 Pg. 177 3 then on such final payment this Indenture and the rights hereby granted shall cease, determine and be void; otherwise this Indenture to be and remain in full force and effect; and THIS INDENTURE FURTHER WITNESSETH and it is expressly declared, that all Bonds executed and delivered and secured hereunder are to be executed, authenticated and delivered and all said property, rights, interests, revenues and receipts hereby pledged, assigned and mortgaged are to be dealt with and disposed of under, on and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Corporation has agreed and covenanted, and does hereby agree and covenant, with the Trustee for the benefit of the Owners, as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.1 Definitions. All words and phrases defined in Article I of the Contract have the same meaning in this Indenture and are incorporated herein by reference. In addition, the following terms, except where the context indicates otherwise, have the respective meanings set forth below. “Acquisition and Construction Fund” means the special fund created under Section 3.11. “Additional Bonds” means additional parity bonds or other parity obligations executed and delivered in accordance with Section 2.11. “Authorized Denomination” means principal amounts of $5,000 or any integral multiple thereof. “Bond Fund” means the special fund created under Section 3.2 of this Indenture. “Bonds” means the 2025 Bonds and any Additional Bonds. “Business Day” means a day on which the Trustee or the County is not required or authorized by law to remain closed. “Cede & Co.” means Cede & Co., the nominee of DTC or any successor nominee of DTC with respect to the Bonds. “Code” means the Internal Revenue Code of 1986, as amended, and the rulings and regulations (including temporary and proposed regulations) promulgated thereunder, or any successor statute thereto. “Contract” means the Installment Financing Contract dated as of April 1, 2025 between the Corporation and the County and any amendments or supplements thereto, including the Exhibits attached thereto. “Corporation Representative” means any person or persons at the time designated to act on behalf of the Corporation for purposes of performing any act on behalf of the Corporation under the Contract and this Indenture by a written certificate furnished to the County and the Trustee containing the specimen signature of such person or persons and signed on behalf of the Corporation by its President. “Cost of Acquisition and Construction” includes payment of or reimbursement for the following items: (a) the Costs of Issuance; HCBOC 031725 Pg. 178 4 (b) obligations incurred or assumed for the Projects in connection with the acquisition, construction, renovation, equipping and financing or refinancing thereof, including, without limitation, costs of obtaining title insurance and a survey of the Mortgaged Property; and (c) all other costs which are considered to be a part of the cost of acquisition, construction, renovation, equipping and financing of the Projects in accordance with generally accepted accounting principles and, to the extent applicable, which will not affect the exclusion from gross income for federal income tax purposes of the designated interest component of Installment Payments payable by the County, including sums required to reimburse the County for advances made by the County that are properly chargeable to the acquisition, construction, renovation, equipping and financing of the Projects. “Costs of Issuance” means the costs incurred in connection with the initial execution and delivery of the Bonds, including, without limitation, all printing expenses in connection with this Indenture, the Contract, and the documents and certificates contemplated hereby, the Preliminary Official Statement and the Official Statement for the Bonds, if any, and the Bonds, legal fees and expenses of counsel to the Corporation, special counsel, counsel to the County, other counsel, counsel to the purchaser or purchasers of the Bonds, financial advisor fees, rating agency fees, any accounting expenses incurred in connection with determining that the Bonds are not “arbitrage bonds” within the meaning of the Code, the Trustee’s initial fees and expenses (including attorney’s fees, costs, and expenses), and state license fees, on the submission of requisitions by the County signed by a County Representative stating the amount to be paid, to whom it is to be paid and the reason for such payment, and that the amount of such requisition is justly due and owing and has not been the subject of another requisition which was paid and is a proper expense of executing and delivering the Bonds. “DTC” means The Depository Trust Company, a limited purpose company organized under the law of the State of New York, and its successors and assigns. “DTC Participant” or “DTC Participants” means securities brokers and dealers, banks, trust companies, clearing corporations and certain other corporations which have access to the DTC system. “Electronic Means” has the meaning set forth in Section 8.1(u). “Event of Default” means those events specified as such in Section 7.1 of this Indenture. “Federal Securities” means, to the extent such investments qualify under Section 159-30, or any replacement statute, of the General Statutes of North Carolina as amended from time to time, (a) direct obligations of the United States of America, obligations the principal of and interest on which are guaranteed by the United States of America or obligations of any agency or instrumentality of the United States of America, in each case for the payment of which the full faith and credit of the United States of America are pledged (including any securities issued or held in the name of the Trustee in book entry form on the books of the Department of the Treasury of the United States of America) which obligations are held by the Trustee and are not subject to prepayment or purchase before maturity at the option of anyone other than the holder; (b) any bonds or other obligations of any state or territory of the United States of America or of any agency, instrumentality or local governmental unit of any such state or territory which are (1) not callable before maturity or (2) as to which irrevocable instructions have been given to the trustee or escrow agent of such bonds or other obligations by the obligor to give due notice of redemption and to call such bonds for redemption on the date or dates specified, and which are rated by Moody’s and S&P within its highest rating category and which are secured as to principal, redemption premium, if any, and interest by a fund consisting only of cash or bonds or other obligations of the character described in clause (a) of this definition which fund may be applied only to the payment of such principal of and interest and redemption HCBOC 031725 Pg. 179 5 premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified prepayment date or dates pursuant to such irrevocable instructions, as appropriate; or (c) evidences of ownership of proportionate interests in future interest and principal payments on specified obligations described in clause (a) or (b) held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor on the underlying obligations described in clause (a) or (b), and which underlying obligations are not available to satisfy any claim of the custodian or any person claiming through the custodian or to whom the custodian may be obligated. “Indenture” means this Indenture of Trust as amended or supplemented from time to time. “Interest Payment Date” means, (a) with respect to the 2025 Bonds, each [____ 1 and _____ 1, beginning ____ 1, 2025], and (b) for any Additional Bonds, the days designated in the supplemental indenture authorizing such Additional Bonds. “LGC” means the Local Government Commission of North Carolina. “Moody’s” means Moody’s Investors Service, its successors and their assigns, and, if such entity for any reason no longer performs the function of a securities rating agency, “Moody’s” will be deemed to refer to any other nationally recognized securities rating agency designated by the Corporation. “Opinion of Counsel” means an opinion in writing of legal counsel, who may be counsel to the Trustee, the County or the Corporation. “Outstanding” or “Bonds Outstanding” means, as of the date in question, all Bonds which have been executed and delivered under this Indenture, except: (a) Bonds canceled or which have been surrendered to the Trustee for cancellation; (b) Bonds in lieu of which other Bonds have been authenticated under Section 2.8 or Section 2.9; (c) Bonds which have been prepaid as provided in Article IV (including Bonds prepaid on a partial payment as provided in Section 4.1); and (d) Bonds which are deemed to have been paid under Article VI. “Owner” or “Owners” means, initially, Cede & Co., as nominee for DTC, and if the book entry system of evidence and transfer of ownership in the Bonds is discontinued pursuant to Section 2.2, the registered owner or owners of any Bond fully registered as shown in the registration books of the Trustee. “Permitted Investments” means investments which are qualified under Section 159-30, or any replacement statute, of the General Statutes of North Carolina, as amended from time to time. “Person” or “person” means natural persons, firms, associations, corporations and public bodies. “Prepayment Fund” means the special fund created under Section 3.7. “Rebate Fund” means the special fund created under Section 3.9. “Record Date” means the fifteenth day (whether or not a Business Day) of the month next preceding an Interest Payment Date. HCBOC 031725 Pg. 180 6 “S&P” means S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC, its successors and their assigns, and, if such entity for any reason no longer performs the function of a securities rating agency, “S&P” will be deemed to refer to any other nationally recognized securities rating agency designated by the Corporation. “Tax Certificate” means, with respect to the 2025 Bonds, the Tax Certificate dated [April 17], 2025, executed by and among the County, the Corporation and the Trustee to signify the acceptance of certain covenants and obligations necessary for the exclusion of interest with respect to the 2025 Bonds from the gross income of the owners thereof under the Code. “Trustee” means U.S. Bank Trust Company, National Association, acting in the capacity of trustee for the Owners pursuant to this Indenture, and any successor thereto appointed under this Indenture. “Trust Estate” means the property pledged and assigned to the Trustee pursuant to and defined as such in the granting clauses hereof. “Trustee Representative” means the person or persons at the time designated to act on behalf of the Trustee for purposes of performing any act on behalf of the Trustee under this Indenture by a written certificate furnished to the County and the Corporation containing the specimen signature of such person or persons and signed on behalf of the Trustee by any duly authorized officer of the Trustee. “2025 Bonds” means the Limited Obligation Bonds (County of Harnett, North Carolina), Series 2025, evidencing proportionate undivided interests in rights to receive certain Revenues pursuant to the Contract, executed and delivered on [April 17], 2025 in the name of Cede & Co. “Underwriters” means, with respect to the 2025 Bonds, PNC Capital Markets LLC and Robert W. Baird & Co., Inc. Section 1.2 Interpretations. For purposes of this Indenture: (a) Successors. References to specific persons, positions or officers include those who or which succeed to or perform their respective functions, duties or responsibilities. (b) Laws. References to the Code, or to the laws or Constitution of the State, or rules or regulations thereunder, or to a section, division, paragraph or other provision thereof, include those laws and rules and regulations, and that section, division, paragraph or other provision thereof as from time to time amended, modified, supplemented, revised or superseded, provided that no such amendment, modification, supplement, revision or supersession shall be applied to alter the obligation to pay the principal, premium, if any, or interest due and owing with respect to the Bonds Outstanding in the amount and manner, at the times, and from the sources provided in this Indenture, except as otherwise herein permitted. (c) Singular/Plural. Unless the context otherwise indicates, words importing the singular number include the plural number and words importing the plural number include the singular number. (d) Computations. Unless otherwise provided in this Indenture or the facts are then otherwise, all computations required for the purposes of this Indenture shall be made on the assumptions that: (1) all Installment Payments are paid as and when the same become due; and (2) all credits required by this Indenture to be made to any fund or account are made in the amounts and at the times required. HCBOC 031725 Pg. 181 7 (e) Exclusion of Bonds Held by or for the County and the Corporation. In determining whether the Owners of the requisite principal amount of Bonds Outstanding have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Bonds owned by the County and the Corporation shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee is protected in relying on any such request, demand, authorization, direction, notice, consent or waiver, only Bonds which the Trustee actually knows to be so owned shall be disregarded. (f) Counsel Opinions. Any opinion of counsel may be qualified by reference to the constitutional powers of the United States of America and the State, the police and sovereign powers of the State, judicial discretion, and bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights and similar matters. (g) Consolidated Certifications, Opinions and Instruments. When several matters are required to be certified by, or covered by an opinion of, any specified person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such person, or that they are so certified or covered by only one document, but one such person may certify or give an opinion with respect to some matters and one or more other such persons as to other matters, and any such person may certify or give an opinion as to such matters in one or several documents. When any person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, such instruments may, but need not, be consolidated and form one instrument. (h) Opinions and Certifications of County and Corporation. Any certificate or opinion of an officer of the County or Corporation may be based, insofar as it relates to legal matters, on a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters on which his or her certificate or opinion is based are erroneous. Any such certificate or opinion may be based, insofar as it relates to factual matters, on a certificate or opinion of, or representations by, an officer or officers of the Corporation or the County stating that the information with respect to such factual matters is in the possession of the County or the Corporation, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such factual matters are erroneous. (i) References to Indenture. The terms “herein,” “hereunder,” “hereby,” “hereto,” “hereof” and any similar terms refer to this Indenture as a whole and not to any particular article, section or subdivision hereof; and the term “heretofore” means before the date of execution of this Indenture, the term “now” means at the date of execution of this Indenture, and the term “hereafter” means after the date of execution of this Indenture. (j) Section and Article References. References in this Indenture to Section or Article numbers, without added references to other documents, are to the indicated Sections or Articles in this Indenture. (k) Gender. Words of the masculine gender include correlative words of the feminine and neuter genders. (l) Remedies. Nothing expressed or implied in this Indenture is intended or shall be construed to confer on or to give any Person, other than the County, the Trustee, the Corporation and the Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture or any covenant, agreement, condition or stipulation hereof. HCBOC 031725 Pg. 182 8 (m) References to Fees and Expenses. Whenever this Indenture contains a reference to fees or expenses, such reference is deemed to include the word “reasonable” as an antecedent thereto. [END OF ARTICLE I] HCBOC 031725 Pg. 183 9 ARTICLE II AUTHORIZATION, TERMS, ISSUANCE OF BONDS Section 2.1 Authorized Amount of Bonds. No Bonds may be executed and delivered under this Indenture except in accordance with this Article II. As provided under Section 2.7, the 2025 Bonds are authorized to be executed and delivered in the aggregate principal amount of $[AMOUNT] and designated “Limited Obligation Bonds (County of Harnett, North Carolina), Series 2025”. Additional Bonds may be executed and delivered as provided in Section 2.11 and supplemental indentures described in Article IX hereof. Section 2.2 Issuance of Bonds. To provide funds for the payment of the Cost of Acquisition and Construction and to provide money for deposit in the other funds and accounts created hereunder, the Bonds shall be executed, sold and delivered under this Indenture. The Bonds shall constitute proportionate undivided interests in the rights to receive Revenues under the Contract. The 2025 Bonds shall mature on [MATURITY DATE] 1 in the years and in the amounts set forth below, and shall bear interest (computed on the basis of a 360-day year of twelve 30-day months and payable on each Interest Payment Date) from the dates as determined by reference to the paragraphs below until the principal with respect to said 2025 Bonds has been paid in full or duly provided for in accordance with the provisions hereof, as follows: [to update at pricing] MATURITY DATE PRINCIPAL AMOUNT INTEREST RATE MATURITY DATE PRINCIPAL AMOUNT INTEREST RATE The 2025 Bonds shall be dated as of the date of their delivery, if executed and delivered before the first Interest Payment Date, or if executed and delivered on any later date, as of the Interest Payment Date next preceding their date of execution and delivery, or if executed and delivered on an Interest Payment Date, as of such date; provided, however, that if the interest with respect to the 2025 Bonds has not been paid in full and is in default, 2025 Bonds executed and delivered in exchange for 2025 Bonds surrendered for transfer or exchange will be dated as of the date to which interest has been paid in full on the 2025 Bonds so surrendered. The 2025 Bonds will be executed and delivered by means of a book-entry system with no physical distribution of 2025 Bonds made to the public. One 2025 Bond for each maturity as set forth in the tables above will be delivered to DTC and immobilized in its custody. A book-entry system will be employed, evidencing ownership of the 2025 Bonds in Authorized Denominations, with transfers of beneficial ownership effected on the records of DTC and DTC Participants pursuant to rules and procedures established by DTC. HCBOC 031725 Pg. 184 10 Each DTC Participant will be credited in the records of DTC with the amount of such DTC Participant’s interest in the 2025 Bonds. Beneficial ownership interests in the 2025 Bonds may be purchased by or through DTC Participants. The holders of these beneficial ownership interests are hereinafter referred to as the “Beneficial Owners.” The Beneficial Owners will not receive 2025 Bonds representing their beneficial ownership interests. The ownership interests of each Beneficial Owner will be recorded through the records of the DTC Participant from which such Beneficial Owner purchased its Bonds. Transfers of ownership interests in the 2025 Bonds will be accomplished by book entries made by DTC and, in turn, by DTC Participants acting on behalf of Beneficial Owners. SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE REGISTERED OWNER OF THE 2025 BONDS, THE TRUSTEE SHALL TREAT CEDE & CO. AS THE ONLY HOLDER OF THE 2025 BONDS FOR ALL PURPOSES UNDER THE INDENTURE, INCLUDING RECEIPT OF ALL PRINCIPAL, PREMIUM, IF ANY, AND INTEREST WITH RESPECT TO THE 2025 BONDS, RECEIPT OF NOTICES, VOTING AND REQUESTING OR DIRECTING THE TRUSTEE TO TAKE OR NOT TO TAKE, OR CONSENTING TO, CERTAIN ACTIONS UNDER THIS INDENTURE. Payments of principal, interest and prepayment premium, if any, with respect to the 2025 Bonds, so long as DTC is the only Owner of the 2025 Bonds, will be paid by the Trustee directly to DTC or its nominee, Cede & Co., as provided in the Blanket Letter of Representation from the County to DTC. DTC will remit such payments to DTC Participants, and such payments thereafter will be paid by DTC Participants to the Beneficial Owners. The County and the Trustee shall not be responsible or liable for payment by DTC or DTC Participants, for sending transaction statements or for maintaining, supervising or reviewing records maintained by DTC or DTC Participants. If (a) DTC determines not to continue to act as securities depository for the 2025 Bonds or (b) the County determines that the continuation of the book-entry system of evidence and transfer of ownership of the 2025 Bonds is not in the best interests of the County or the Beneficial Owners of the 2025 Bonds, the County shall discontinue the book-entry system with DTC. If the County fails to identify another qualified securities depository to replace DTC, the County will cause the Trustee to authenticate and deliver replacement 2025 Bonds in the form of fully registered 2025 Bonds in accordance with DTC’s rules and procedures. THE COUNTY, THE CORPORATION AND THE TRUSTEE DO NOT HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO ANY DTC PARTICIPANT OR ANY BENEFICIAL OWNER WITH RESPECT TO (A) THE 2025 BONDS; (B) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT; (C) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL AND PREMIUM, IF ANY, AND INTEREST WITH RESPECT TO THE 2025 BONDS; (D) THE DELIVERY OR TIMELINESS OF DELIVERY BY DTC OR ANY DTC PARTICIPANT OF ANY NOTICE DUE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THIS INDENTURE TO BE GIVEN TO OWNERS; (E) THE SELECTION OF BENEFICIAL OWNERS TO RECEIVE PAYMENTS IN THE EVENT OF ANY PARTIAL PREPAYMENT OF THE 2025 BONDS; OR (F) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC, OR ITS NOMINEE, CEDE & CO., AS OWNER. If a book-entry system of evidence and transfer of ownership of the 2025 Bonds is discontinued pursuant to the provisions of this Section, the 2025 Bonds shall be delivered, in accordance with DTC’s rules and procedures, as fully registered Bonds without coupons in Authorized Denominations, shall be lettered “R” and numbered separately from 1 upward, and shall be payable, executed, authenticated, registered, exchanged and canceled pursuant to the provisions of Article II. The 2025 Bonds and any premiums on the prepayment thereof before maturity will be payable in lawful money of the United States of America and at the designated corporate trust office of the Trustee on presentation and surrender. Interest with respect to the 2025 Bonds will be paid by the Trustee by check mailed on the Interest Payment Date to each Owner as its name and address appear on the register kept by HCBOC 031725 Pg. 185 11 the Trustee at the close of business on the Record Date. At the written request of any Owner of at least $1,000,000 in aggregate principal amount of the 2025 Bonds, principal and interest may be payable by wire transfer at the address specified in writing by the Owner by the Record Date. As long as Cede & Co. or another DTC nominee is the registered owner of the 2025 Bonds, the Trustee shall make all payments with respect to the 2025 Bonds by wire transfer in immediately available funds. CUSIP number identification with appropriate dollar amounts for each CUSIP number shall accompany all payments of principal and interest with respect to any 2025 Bond, whether by check or by wire transfer. Details of Additional Bonds shall be set forth in supplemental indentures providing for their execution and delivery. Section 2.3 Limited Obligation. Each Bond shall evidence a proportionate undivided interest in the right to receive certain Revenues. The Bonds are payable solely from Revenues as, when and if the same are received by the Trustee, which Revenues are to be held in trust by the Trustee for such purposes in the manner and to the extent provided herein. The Owner of each Bond is not entitled to receive more than the amount of principal, premium, if any, and interest represented by such Bond. The Bonds do not constitute a debt of the County or any assignee of the County under the Contract. NOTWITHSTANDING ANY PROVISION OF THIS INDENTURE, THE CONTRACT OR THE DEED OF TRUST WHICH MAY BE TO THE CONTRARY, NO PROVISION OF THIS INDENTURE, THE CONTRACT OR THE DEED OF TRUST SHALL BE CONSTRUED OR INTERPRETED AS CREATING A PLEDGE OF THE FAITH AND CREDIT OF THE COUNTY WITHIN THE MEANING OF THE CONSTITUTION OF THE STATE. NO PROVISION OF THIS INDENTURE, THE CONTRACT OR THE DEED OF TRUST SHALL BE CONSTRUED OR INTERPRETED AS CREATING A DELEGATION OF GOVERNMENTAL POWERS NOR AS A DONATION BY OR A LENDING OF THE CREDIT OF THE COUNTY WITHIN THE MEANING OF THE CONSTITUTION OF THE STATE. THIS INDENTURE, THE CONTRACT OR THE DEED OF TRUST SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE COUNTY TO MAKE ANY PAYMENTS BEYOND THOSE APPROPRIATED IN THE SOLE DISCRETION OF THE COUNTY FOR ANY FISCAL YEAR IN WHICH THE CONTRACT IS IN EFFECT; PROVIDED, HOWEVER, ANY FAILURE OR REFUSAL BY THE COUNTY TO APPROPRIATE FUNDS, WHICH RESULTS IN THE FAILURE BY THE COUNTY TO MAKE ANY PAYMENT COMING DUE UNDER THE CONTRACT WILL IN NO WAY OBVIATE THE OCCURRENCE OF THE EVENT OF DEFAULT RESULTING FROM SUCH NONPAYMENT. NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE COUNTY IN ANY ACTION FOR ANY BREACH OF THE CONTRACT, THIS INDENTURE OR THE DEED OF TRUST, AND THE TAXING POWER OF THE COUNTY IS NOT AND MAY NOT BE PLEDGED DIRECTLY OR INDIRECTLY OR CONTINGENTLY TO SECURE ANY MONEY DUE UNDER THIS INDENTURE, THE CONTRACT OR THE DEED OF TRUST. TO THE EXTENT OF ANY CONFLICT BETWEEN THIS PARAGRAPH AND ANY OTHER PROVISION OF THIS INDENTURE, THIS PARAGRAPH SHALL TAKE PRIORITY AND SHALL INCORPORATE HEREIN BY REFERENCE ARTICLE XIV OF THE CONTRACT. Section 2.4 Execution of the Bonds. The Bonds will be executed on behalf of the Corporation with the manual or facsimile signature of its President or any Vice President. If any officer of the Corporation whose signature or whose facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds, such signature or the facsimile thereof shall nevertheless be valid and sufficient for all purposes as if he had remained in office until authentication; and any Bond may be signed on behalf of the Corporation by such persons as are at the time of execution of such Bond proper officers of the Corporation, even though at the date of this Indenture, such person was not such officer. Section 2.5 Authentication. No Bond is valid or becomes obligatory for any purpose or is entitled to any security or benefit under this Indenture unless and until a certificate of authentication on such Bond substantially in the form included in Exhibit A hereto has been duly executed by the Trustee and such executed certificate of the Trustee on any such Bond is conclusive evidence that such Bond has been authenticated and delivered under this Indenture. The Trustee’s certificate of authentication on any Bond is HCBOC 031725 Pg. 186 12 deemed to have been executed by it if signed by an authorized officer or signatory of the Trustee, but it is not necessary that the same officer or signatory sign the certificate of authentication on all of the Bonds executed and delivered under this Indenture. Section 2.6 Form of 2025 Bonds. The 2025 Bonds shall be substantially in the form set forth in Exhibit A to this Indenture, with such appropriate variations, legends, omissions and insertions as may be permitted or required hereby. The form of all Additional Bonds shall be as set forth in the supplemental indenture providing for their execution and delivery. Section 2.7 Delivery of the 2025 Bonds. On the execution and delivery of this Indenture, the Corporation shall initially execute and deliver to the Trustee the 2025 Bonds in the aggregate principal amount of $[AMOUNT], and the Trustee shall authenticate the 2025 Bonds and shall deliver them to the original purchaser thereof as directed by the Corporation as hereinafter in this Section provided. (a) Before the delivery of any of the 2025 Bonds, the Trustee shall have received: (1) an originally executed counterpart of the Contract, this Indenture and the Deed of Trust and a certified copy of the resolution adopted by the Board of Directors of the Corporation approving the Contract; (2) a request and authorization to the Trustee on behalf of the Corporation and signed by a Corporation Representative to authenticate and deliver the 2025 Bonds; (3) the approval of the LGC; and (4) an executed opinion of nationally recognized bond counsel selected by the County. (b) Then, the Trustee shall deliver the 2025 Bonds, on payment to the Trustee of a sum specified in the contract of purchase among the County, the Corporation, and the Underwriter. Such sum shall be applied as provided in Article III. Section 2.8 Mutilated, Lost, Stolen or Destroyed Bonds. If any Bond is mutilated, lost stolen or destroyed, a new Bond may be executed on behalf of the Corporation, of like date, maturity, denomination and series as that mutilated, lost, stolen or destroyed; provided that the Trustee has received indemnity of the County, the Corporation and the Trustee from the Owner of the Bond satisfactory to the Trustee, the County and the Corporation, as applicable, and provided further, in case of any mutilated Bond, that such mutilated Bond is first surrendered to the Trustee, and in the case of any lost, stolen or destroyed Bond, that there is first furnished to the Trustee evidence of such loss, theft or destruction satisfactory to the Trustee. If any such Bond has matured or is being prepaid, instead of delivering a duplicate Bond, the Trustee may pay the same without surrender thereof. The Trustee may charge the Owner of the Bond with its reasonable fees and expenses (including attorney’s fees, costs and expenses, if any) in this connection. Section 2.9 Registration of Bonds; Persons Treated as Owners; Transfer of Bonds. Books for the registration and for the transfer of Bonds shall be kept by the Trustee which is hereby appointed the registrar. On surrender for transfer of a Bond at the designated corporate trust office of the Trustee, duly endorsed for transfer or accompanied by an assignment duly executed by the Owner or his attorney duly authorized in writing, the Trustee shall deliver in the name of the transferee or transferees a new authenticated and fully registered Bond or Bonds of the same series. HCBOC 031725 Pg. 187 13 The Trustee is not required to register the transfer of any Bonds during the period of 15 days next preceding the mailing of notice calling such Bond for prepayment as herein provided, or after any Bond has been selected for prepayment. As to any Bond, the person in whose name the same is registered is deemed and regarded as the absolute owner thereof for all purposes, and payment of either principal or interest with respect to such Bond shall be made only to or on the written order of the Owner thereof or his legal representative, but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge such Bond to the extent of the sum or sums paid. The Trustee shall require the payment, by any Owner requesting a transfer of Bonds, of any tax, trustee fee, fee or other governmental charge required to be paid with respect to such transfer. If any transfer requires that more than one Bond be executed and delivered, the principal amounts of which equal the principal amount of the Bonds surrendered for transfer, an additional fee (including the cost of printing the Bonds, if necessary) will be required. Section 2.10 Cancellation of Bonds. Whenever any Outstanding Bonds are delivered to the Trustee for cancellation pursuant to this Indenture, on payment thereof or for or after replacement pursuant to Section 2.8 or Section 2.9 of this Indenture, such Bonds shall be promptly canceled in accordance with the Trustee’s procedures for the cancellation and destruction of instruments. Section 2.11 Additional Bonds. So long as the Contract remains in effect and no Event of Default has occurred and is continuing, Additional Bonds may be executed and delivered on the terms and conditions provided herein. Additional Bonds may be delivered by the Trustee at the direction of the Corporation to provide funds to pay: (1) the cost of expanding the Projects; acquiring, constructing, renovating and equipping other facilities; or acquiring equipment and other capital assets for utilization by or on behalf of the County for public purposes; (2) the cost of refunding all or any portion of the Bonds then Outstanding or any other financing obligations of the County; and (3) the Costs of Issuance relating to the execution, delivery and sale of the Additional Bonds. Additional Bonds may be executed and delivered only on there being filed with the Trustee: (a) Originally executed counterparts of a supplemental indenture and an amendment to the Contract adopted in accordance with the requirements of Article IX and approved by the LGC, if so required by law, including requirements regarding approval of the Owners, if applicable, expressly providing that the Additional Bonds being executed and delivered as well as any Bonds and Additional Bonds theretofore executed and delivered shall be secured on a parity as hereinafter provided, except that the date or dates of the Additional Bonds, the rate or rates of interest with respect to the Additional Bonds, the time or times of payment of the interest with respect thereto and the principal amount thereof, and provisions for the prepayment thereof, if any, all shall be as provided in the supplemental indenture and amendment to the Contract, and further providing for an increase in the Purchase Price and the Installment Payments required or authorized to be paid to the Trustee under the Contract in such amount as shall be necessary to pay (assuming that no Event of Default shall occur), the principal, premium, if any, and interest with respect to the Additional Bonds. (b) A written opinion or opinions of nationally recognized bond counsel and mutually acceptable to the County and the Corporation, to the effect that the amendment to the Contract and the execution and delivery of the Additional Bonds have been duly authorized, that the amendment HCBOC 031725 Pg. 188 14 to the Contract is valid and enforceable against the County and, to the extent applicable, that the exclusion from gross income for federal income tax purposes of the interest component of the Installment Payments will not be adversely affected by the execution and delivery of the Additional Bonds, and that the execution, sale, and delivery of the Additional Bonds will not constitute a default under the Contract or this Indenture or cause any violation of the covenants, agreements or representations therein or herein. (c) A written order from the Corporation to the Trustee to deliver the Additional Bonds to the purchaser or purchasers therein identified on payment to the Trustee of a specified sum plus accrued interest, if any. Each of the Additional Bonds executed and delivered under this Section 2.11 shall evidence a proportionate undivided interest in rights to receive certain Revenues under the Contract, as amended, proportionately and ratably secured with the 2025 Bonds originally executed and delivered and all Additional Bonds, if any, executed and delivered under this Section 2.11, without preference, priority or distinction of any 2025 Bonds or Additional Bond over any other. [END OF ARTICLE II] HCBOC 031725 Pg. 189 15 ARTICLE III REVENUES AND FUNDS Section 3.1 Source of Payment of Bonds; Deposit of Bond Proceeds. The Bonds evidence proportionate undivided interests in rights to receive certain Revenues under the Contract. Installment Payments, when, as and if received by the Trustee, shall be held hereunder for payment of the principal, premium, if any, and interest with respect to the Bonds as provided in this Indenture. On receipt of the proceeds of the sale of the 2025 Bonds of $[_________], the Trustee shall deposit such proceeds in the 2025 Account of the Acquisition and Construction Fund. The proceeds of any Additional Bonds, executed and delivered under Section 2.11, shall be applied by the Trustee as directed in a supplemental indenture or a certificate signed by a County Representative. Section 3.2 Creation of the Bond Fund. A special fund is hereby created and established with the Trustee, to be designated “County of Harnett, NC 2025 Installment Financing Contract Bond Fund” (the “Bond Fund”), the money in which shall be used to pay the principal, premium, if any, and interest with respect to the Bonds. Within the Bond Fund, there are hereby created and ordered established an Interest Account and a Principal Account, the money in each of which shall be used as set forth in Section 3.5. A “2025 Subaccount of the Interest Account” is created within the Interest Account of the Bond Fund. A “2025 Subaccount of the Principal Account” is created within the Principal Account of the Bond Fund. Section 3.3 Payments Into the Interest Account of the Bond Fund. There shall be deposited into the Interest Account of the Bond Fund (1) that portion of each payment of Installment Payments which is designated and paid as interest under the Contract; (2) investment earnings on the Bond Fund and the Prepayment Fund, as provided in Section 3.5 and Section 3.7, respectively; (3) Net Proceeds from any lease of the Mortgaged Property, including after an Event of Default to the extent required to pay the next installment of interest or any previous installment of interest not paid; (4) all money required to be deposited therein in accordance with this Indenture; and (5) all other money received by the Trustee under this Indenture accompanied by directions from the County that such money is to be deposited into the Interest Account of the Bond Fund. The Trustee shall credit all amounts deposited into the Interest Account of the Bond Fund, including particularly the amounts set forth in Section 3.1 of the Contract, toward the interest component of the Installment Payment then due and payable under the Contract. The Trustee shall notify the County of all amounts credited toward such Installment Payments within 30 days of such credit. Section 3.4 Payments Into the Principal Account of the Bond Fund. There shall be deposited into the Principal Account of the Bond Fund (a) that portion of each payment of Installment Payments which is designated and paid as principal with respect to the Bonds under the Contract; (b) Net Proceeds from any lease of the Mortgaged Property, including after an Event of Default after the deposit required by Section 3.3; (c) all money required to be deposited therein in accordance with this Indenture; and (d) all other money received by the Trustee under this Indenture accompanied by directions from the County that such money is to be deposited into the Principal Account of the Bond Fund. Section 3.5 Use of Money in the Bond Fund. Money in the Interest Account of the Bond Fund shall be used for the payment of the interest with respect to the Bonds as the same becomes due and payable. Money in the Principal Account of the Bond Fund shall be used for the payment of the principal with respect to the Bonds. Investment earnings on money on deposit in the Interest Account and Principal Account of the Bond Fund shall be applied to the next payment of Installment Payments with respect to the Bonds. If the Bonds are to be prepaid in whole pursuant to Section 4.1(a), any money remaining in the Interest Account and Principal Account of the Bond Fund shall be applied to such prepayment along with other money held by the Trustee for such purpose. HCBOC 031725 Pg. 190 16 Section 3.6 Custody of the Bond Fund. The Bond Fund shall be in the custody of the Trustee. The Trustee shall withdraw sufficient funds from the Bond Fund to pay the principal of and interest with respect to the Bonds as the same become due and payable. Section 3.7 Creation of the Prepayment Fund. There is hereby created and established with the Trustee the “County of Harnett, NC 2025 Installment Financing Contract Prepayment Fund” (the “Prepayment Fund”). A “2025 Account” is hereby created within the Prepayment Fund. The Trustee shall deposit into the Prepayment Fund any money provided by the County as a prepayment of Installment Payments and apply such funds to prepay Installment Payments as directed in writing by the County. Money on deposit in the Prepayment Fund shall be disbursed for prepayment of the Bonds as provided in Section 4.1(a) of this Indenture. Any income from investment of money in the Prepayment Fund shall be deposited into the Interest Account of the Bond Fund and applied to the interest component of the next payment of the Installment Payments. Whenever any money on deposit in the Prepayment Fund is disbursed for prepayment of less than all of the Outstanding Bonds, the Installment Payments set forth in the Contract shall be recalculated by the Trustee and verified by the County to reflect the reduction in the outstanding principal amount of the Bonds after such prepayment. Section 3.8 Nonpresentment of Bonds. If any Bond is not presented for payment when due, if funds sufficient to pay such Bond have been made available to the Trustee for the benefit of the Owner thereof, it is the duty of the Trustee to hold such funds uninvested and without liability for interest with respect thereto, for the benefit of the Owner of such Bond, who shall be restricted exclusively to such funds for any claim of whatever nature on his or her part under the Contract or this Indenture or on or with respect to such Bond. Any money that is so set aside or transferred and that remains unclaimed by the Owners for a period of five years after the date on which such Bonds have become payable will be treated as abandoned property under N.C.G.S. § 116B et seq., and the Trustee shall report and remit this property to the State Treasurer according to the requirements of N.C.G.S. § 116B. Thereafter, the Owners may look to the State Treasurer for payment and then only to the extent of the amounts so received without any interest with respect thereto, and the Trustee, the Corporation and the County shall have no responsibility with respect to such money. Section 3.9 Rebate Fund. If the County informs the Trustee in writing that funds are to be set aside in a separate account of the Trustee to be held for the payment of rebate payments to the Federal Government pursuant to the terms of the Tax Certificate, the Trustee shall create and establish the “County of Harnett, NC 2025 Installment Financing Contract Rebate Fund” (the “Rebate Fund”) and a “2025 Account” within the Rebate Fund. The Trustee shall deposit in the Rebate Fund the amounts as directed by the County. The County shall make or cause to be made the calculation or calculations required by the Tax Certificate and shall direct the Trustee in writing to make deposits and disbursements from the Rebate Fund in accordance therewith. The Trustee shall invest the Rebate Fund as directed in writing by the County. The Rebate Fund is a trust fund, but amounts therein do not constitute part of the Trust Estate. Section 3.10 Rebate Disbursements. Not later than 30 days after the end of the fifth anniversary of the execution and delivery of the 2025 Bonds and every five years thereafter, the Trustee shall pay to the United States from the Rebate Fund the amount required to be on deposit in the Rebate Fund as of such payment date as determined by the County. Such amounts required to be on deposit in the Rebate Fund shall be provided from the County to the Trustee, and the Trustee shall not be required to risk or expend any of its own money for this purpose. Not later than 30 days after the final retirement of the 2025 Bonds, the Trustee shall pay to the United States such amount from the Rebate Fund as directed by the County. Each payment required to be paid to the United States pursuant to this Section shall be filed with the Internal Revenue Service Center, 1160 West 1200 Street, Ogden, Utah 84201 or such other place as the County may direct. The Trustee shall have no liability for the calculation or payment of rebate except in accordance with HCBOC 031725 Pg. 191 17 this Indenture, the Trustee’s express obligations under the Tax Certificate and written instructions provided to the Trustee by the County. Each such payment shall be accompanied by a statement, prepared or caused to be prepared by the County, summarizing the determination of the amount to be paid to the United States upon which the Trustee shall conclusively rely. Section 3.11 Creation of the Acquisition and Construction Fund. A special fund is hereby created and established with the Trustee to be designated “County of Harnett, NC 2025 Installment Financing Contract Acquisition and Construction Fund” (the “Acquisition and Construction Fund”). The Trustee shall deposit in the applicable account of the Acquisition and Construction Fund the amounts as set forth in Section 3.1. In addition, the Trustee shall deposit into the Acquisition and Construction Fund such amounts as the County may designate in a certificate signed by a County Representative in connection with the execution and delivery of Additional Bonds under Section 2.11. Any money held in the Acquisition and Construction Fund or any account thereof shall be invested and reinvested by the Trustee at the direction of the County in accordance with this Indenture, and the income therefrom shall be retained in the Acquisition and Construction Fund or any account thereof and used (together with all other money held in the Acquisition and Construction Fund) to pay the Cost of Acquisition and Construction attributable to the Projects and otherwise, as directed by the County in accordance with Section 4.2 of the Contract. The Trustee is hereby directed to create a separate account within the Acquisition and Construction Fund designated the “2025 Account of the Acquisition and Construction Fund” (the “2025 Account”) into which the proceeds of the 2025 Bonds will be deposited as set forth in Section 3.1. Funds in the 2025 Account shall be invested as set forth in the last paragraph of Article V. The Trustee shall create additional accounts within the Acquisition and Construction Fund on the County’s written direction. Money in each account of the Acquisition and Construction Fund will be applied to the Cost of Acquisition and Construction of the Projects to which they relate. Any funds remaining in the Acquisition and Construction Fund or an account thereof, on completion of the Projects to which such funds relate, as certified in writing to the Trustee by a County Representative, (i) may be applied by the Trustee for any purpose permitted by applicable law provided the County’s bond counsel provides written confirmation to the Trustee that such application will not cause interest with respect to any series of Outstanding Bonds executed and delivered with the expectation that interest with respect thereto would be excludable from the gross income of the owners thereof under the Code to become taxable or (ii) absent the confirmation described in (i) above and if within three years of the execution and delivery of the Bonds to which the excess proceeds relate, will be deposited first to the credit of the Interest Account of the Bond Fund and applied to the future Installment Payments coming due under the Contract with respect to the applicable series of Outstanding Bonds in the order of their due date. If no funds remain in the 2025 Account, the Trustee may close the 2025 Account. Section 3.12 Money To Be Held in Trust; Reports to County. The ownership of the Bond Fund, the Prepayment Fund, the Acquisition and Construction Fund and any other fund or account, except for the Rebate Fund, created hereunder or under the Contract shall be in the Trustee, for the benefit of the Owners as specified in the Indenture, except as may be expressly provided otherwise in this Indenture, the Contract, or any supplement or amendment thereto. Not less than once during each month, the Trustee shall provide or otherwise make available to the County an accounting for all receipts to and disbursements from each fund or account. Section 3.13 Repayment to the County from the Trustee. After payment in full of the Bonds, the interest with respect thereto, any premium with respect thereto, the fees, charges and expenses of the Trustee and all other amounts required to be paid hereunder, any amounts remaining in the Bond Fund, the Prepayment Fund, the Acquisition and Construction Fund or otherwise held by the Trustee pursuant hereto other than the Rebate Fund shall be paid to the County on the expiration or sooner termination of the Contract as a return of an overpayment of Installment Payments. HCBOC 031725 Pg. 192 18 Section 3.14 Custody of Separate Trust Fund. The Trustee is authorized and directed to create as necessary a separate fund to hold all Net Proceeds from any insurance proceeds or condemnation awards that are required to be held by the Trustee in a separate fund pursuant to Article VII of the Contract, and to disburse such proceeds in accordance with Article VIII of the Contract. [END OF ARTICLE III] HCBOC 031725 Pg. 193 19 ARTICLE IV PREPAYMENT OF BONDS Section 4.1 Prepayment Dates and Prices. The 2025 Bonds are subject to prepayment, in whole or in part, as set forth in this Article IV. Additional Bonds may be subject to prepayment as provided in the supplemental indenture providing for their execution and delivery. [to update section at pricing as necessary] (a) Optional Prepayment. The 2025 Bonds maturing on or before [MATURITY DATE] 1, 2035 are not subject to optional prepayment before their maturities. The 2025 Bonds maturing on or after [MATURITY DATE] 1, 2036 are subject to optional prepayment in whole or in part on any date on or after [MATURITY DATE] 1, 2035, at the option of the County, at the prepayment price equal to 100% of the principal amount of such 2025 Bonds to be prepaid, together with accrued interest to the date fixed for prepayment. (b) [Mandatory Prepayment. (1) The 2025 Bonds maturing on [MATURITY DATE] 1, 20__ (the “Term Bonds”) are subject to mandatory sinking fund prepayment on [MATURITY DATE] 1 in the years and in the amounts set forth below from the principal components of the Installment Payments required to be paid by the County under the Contract with respect to each such prepayment date, at a prepayment price equal to 100% of the principal amount thereof to be prepaid, together with accrued interest with respect thereto to the prepayment date, without premium, as follows: YEAR AMOUNT _______________ *Maturity. (2) At its option, to be exercised on or before the 45th day next preceding any mandatory prepayment date, the County may receive a credit in respect of its mandatory prepayment obligation for any portion of the Term Bonds which before said date has been prepaid (otherwise than through mandatory prepayment under this Section 4.1(b)) and canceled by the Trustee and not theretofore applied as a credit against any mandatory prepayment obligation. Each such portion of the Term Bonds so prepaid and canceled by the Trustee shall be credited by the Trustee at 100% of the principal amount thereof against the Installment Payment obligation corresponding to such mandatory prepayment date. To the extent that the aggregate principal amount of such portion of the Term Bonds exceeds the Installment Payment obligation on such mandatory prepayment date, any excess over such amount shall be credited against future Installment Payment obligations with respect to the Term Bonds, as directed by the County, and the principal amount of the Term Bonds to be prepaid shall be accordingly reduced. HCBOC 031725 Pg. 194 20 The County must on or before the 45th day next preceding each such mandatory prepayment date furnish the Trustee with its certificate indicating to what extent the provisions of the preceding paragraph are to be availed with respect to such mandatory prepayment.] (c) Selection. If called for optional prepayment in part, the 2025 Bonds to be prepaid shall be prepaid in such order as the County shall select and within the same maturity as selected by DTC pursuant to its rules and procedures or, if the book-entry system with respect to the 2025 Bonds is discontinued as provided in Section 2.2, by lot within a maturity in such manner as the Trustee in its discretion may determine; provided that, if prepaid in part, the 2025 Bonds may be prepaid only in multiples of $5,000. When 2025 Bonds are to be prepaid in part, the schedule of Installment Payments set forth in the Contract shall be recalculated as necessary by the Trustee and verified by the County in the manner required by Section 3.7. The Trustee shall pay to the Owners of 2025 Bonds so prepaid the amounts due on their respective 2025 Bonds at the designated corporate trust office of the Trustee on presentation and surrender of the 2025 Bonds. Prepayments shall be accompanied by a written designation prepared by the Trustee stating the portion of the payment representing the unpaid principal amount of the 2025 Bonds immediately before the payment, the portion of the payment representing interest, and the remaining portion, if any, which shall be designated and paid as a prepayment premium. Section 4.2 Notice of Prepayment. Notice of prepayment identifying the 2025 Bonds or portions thereof to be prepaid shall be given by the Trustee in writing not less than 30 days nor more than 60 days before the date fixed for prepayment by Electronic Means or by first class mail, postage prepaid (or, in the case of notice to DTC, by registered or certified mail or otherwise in accordance with DTC’s then-existing rules and procedures) (1) to DTC or its nominee or to the then-existing securities depositories, or (2) if DTC or its nominee or another securities depository is no longer the Owner of the 2025 Bonds, to the then-registered Owners of the 2025 Bonds to be prepaid at their addresses appearing on the registration books maintained by the Trustee, (3) to the LGC, and (4) to the Municipal Securities Rulemaking Board (the “MSRB”) via its Electronic Municipal Marketplace Access (“EMMA”) system (or any successor thereto); provided however, that the Trustee shall have no liability to any party in connection with any failure to timely file any notice with the MSRB via its EMMA system (or any successor thereto) and the sole remedy for any such failure shall be an action by the Owners in mandamus for specific performance or similar remedy to compel performance. Notwithstanding the foregoing, (1) if notice is given, the failure to receive an appropriate notice shall not affect the validity of the proceedings for such prepayment, (2) the failure to give any such notice or any defect therein shall not affect the validity of the proceedings for the prepayment of the 2025 Bonds or portions thereof with respect to which notice was correctly given, and (3) the failure to give any such notice to the LGC or the MSRB, or any defect therein, shall not affect the validity of any proceedings for the prepayment of the 2025 Bonds. Notice of prepayment shall specify, as applicable, (1) that the 2025 Bonds or a designated portion thereof are to be prepaid, (2) the CUSIP numbers, if any, of the 2025 Bonds to be prepaid (unless all the 2025 Bonds are being prepaid), (3) the prepayment date, (4) the prepayment price, (5) the prepayment agent’s name and address, (6) the date of original execution and delivery of the 2025 Bonds to be prepaid, (7) the interest rate with respect to the 2025 Bonds to be prepaid, (8) the maturity date of the 2025 Bonds to be prepaid and (9) if a prepayment in part, the amounts of each maturity being prepaid. HCBOC 031725 Pg. 195 21 Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives the notice. In the case of an optional prepayment of the 2025 Bonds, the prepayment notice may state (1) that it is conditioned upon the deposit of money with the Trustee on the prepayment date at the time and in an amount equal to the amount necessary to effect the prepayment and such notice will be of no effect unless such money is so deposited, and (2) that the County retains the right to rescind the prepayment notice on or prior to the scheduled prepayment date, and such notice and optional prepayment shall be of no effect if such money is not so deposited or if the notice is rescinded as described in Section 4.3 herein. Section 4.3 Prepayments. On or before the date fixed for prepayment, funds shall be deposited with the Trustee to pay, and the Trustee is hereby authorized and directed to apply such funds to the payment of, the Bonds or portions thereof called, together with accrued interest with respect thereto to the prepayment date, and any required premium. On the giving of notice and the deposit of such funds for prepayment pursuant to this Indenture, interest with respect to the Bonds or portions thereof thus called shall no longer accrue after the date fixed for prepayment. The Bonds or portions thereof called for prepayment shall be due and payable on the prepayment date at the prepayment price, together with accrued interest with respect thereto to the prepayment date and any applicable prepayment premium. If any required notice of prepayment has been given and money sufficient to pay the prepayment price, together with accrued interest with respect thereto to the prepayment date and any required prepayment premium, has been deposited with the Trustee, the Bonds or portions thereof so called for prepayment shall cease to be entitled to any benefit or security under this Indenture and the Owners of such Bonds shall have no rights with respect to such Bonds or portions thereof so called for prepayment except to receive payment of the prepayment price and accrued interest to the prepayment date from such funds held by the Trustee. Any scheduled optional prepayment of Bonds or portions thereof may be rescinded in whole or in part at any time prior to the prepayment date if the County delivers written notice to the Trustee instructing the Trustee to rescind the prepayment notice. The Trustee shall give prompt notice of such rescission to the affected Owners of the Bonds. Any Bonds where optional prepayment has been rescinded shall remain Outstanding, and the rescission shall not constitute an Event of Default. Further, the failure of the Corporation or County to make funds available in part or in whole on or before the prepayment date shall not constitute an Event of Default, and the Trustee shall give immediate notice to the affected Owners of the Bonds that the prepayment did not occur and that the Bonds called for prepayment and not so paid remain Outstanding. Anything in this Indenture to the contrary notwithstanding, if an Event of Default occurs and is continuing, there will be no prepayment of less than all of the Bonds Outstanding. Section 4.4 Cancellation. All Bonds which have been prepaid shall not be redelivered but shall be canceled and destroyed by the Trustee in accordance with Section 2.10. Section 4.5 Delivery of New Bonds On Partial Prepayment of Bonds. On surrender and cancellation of the Bonds called for optional prepayment in part only, a new Bond or Bonds of the same maturity and interest rate and of Authorized Denominations, in an aggregate principal amount equal to the unprepaid portion thereof, shall be executed on behalf of the Corporation and authenticated and delivered by the Trustee. The expenses of such execution, authentication, delivery and exchange shall be paid by the County as Additional Payments under the Contract. HCBOC 031725 Pg. 196 22 Section 4.6 Purchase at Any Time. The Trustee, upon the written request of the County, shall purchase Bonds as specified by the County in the open market at a price not exceeding a price set by County. Such purchase of Bonds shall be made with funds provided to the Trustee by the County. Upon purchase by the Trustee, such Bonds shall be treated as delivered for cancellation pursuant to Section 2.10. Nothing in this Indenture shall prevent the County from purchasing Bonds on the open market without the involvement of the Trustee and delivering such Bonds to the Trustee for cancellation pursuant to Section 2.10. [END OF ARTICLE IV] HCBOC 031725 Pg. 197 23 ARTICLE V INVESTMENTS All money held as part of the Bond Fund, the Prepayment Fund, the Acquisition and Construction Fund or any other fund or account created hereunder or under the Contract except the Rebate Fund shall be deposited or invested and reinvested from time to time by the Trustee, at the written direction of the County as agent of the Corporation, in deposits or investments, which are certified by the County to be Permitted Investments subject to the following restrictions: (a) Money in the Acquisition and Construction Fund shall be invested only in obligations which will by their terms mature not later than the date the County estimates, in a writing provided to the Trustee, the money represented by the particular investment will be needed for withdrawal from the Acquisition and Construction Fund; (b) Money in the Bond Fund shall be invested only in obligations which will by their terms mature on such dates as to ensure that on the date of each interest and principal payment, there will be in the Bond Fund from matured obligations and other money already in the Bond Fund, cash to pay the interest and principal payable on such payment date; and (c) Money in the Prepayment Fund shall be invested in obligations which will by their terms mature, or will be subject to prepayment at the option of the owner thereof, on or before the date funds are expected to be required for expenditure or withdrawal. The Rebate Fund shall be invested and reinvested by the Trustee, at the written direction of the County. The County acknowledges that all investment directions given to the Trustee under this Article are required to comply with the terms of the Tax Certificate, and the Trustee may rely upon any such direction as to such compliance. If the County fails to provide the Trustee with written investment direction for any funds held by the Trustee under this Indenture, then the Trustee will hold such amounts uninvested in cash and without liability for interest. Any and all such deposits or investments shall be held by or under the control of the Trustee. The Trustee may make any and all such deposits or investments through its own investment department or the investment department of any bank, trust company or financial institution under common control with the Trustee and may charge its ordinary and customary fees for such investments, as agreed to by the County. The Trustee is specifically authorized to enter into agreements with itself or any other person, which agreements guarantee the repurchase of specific Permitted Investments at specific prices. Except as expressly provided in Article III of this Indenture, deposits or investments shall at all times be a part of the fund or account from which the money used to acquire such deposits or investments shall have come, and all income and profits on such deposits or investments shall be credited to, and losses thereon shall be charged against, such fund or account. In computing the amount in any fund or account held under the provisions of this Indenture, obligations purchased as a deposit or investment of money therein shall be valued at the market price thereof, exclusive of accrued interest. The Trustee shall sell and reduce to cash a sufficient amount of such deposits or investments whenever the cash balance in any fund or account created hereunder is insufficient to satisfy the purposes of such fund or account. The Trustee shall conclusively rely upon the County’s written instructions as to both the suitability and legality of all directed investments. Ratings of investments shall be determined at the time of purchase of such investments and without regard to ratings subcategories. Although the Corporation and the County each recognizes that it may obtain a broker confirmation or written statement containing comparable information at no additional cost, the Corporation and the County each hereby agrees that broker confirmations of investments are not required to be issued by the Trustee for each month in which a monthly statement is rendered or made available by the Trustee. HCBOC 031725 Pg. 198 24 The Trustee may elect, but shall not be obligated, to credit the funds and accounts held by it with money representing income or principal payments due on, or sales proceeds due in respect of, Permitted Investments in such funds and accounts, or to credit to Permitted Investments intended to be purchased with such money, in each case before actually receiving the requisite money from the payment source, or to otherwise advance funds for account transactions. The County acknowledges that the legal obligation to pay the purchase price of any Permitted Investments arises immediately at the time of the purchase. Notwithstanding anything else in this Indenture, (i) any such crediting of funds or assets shall be provisional in nature, and the Trustee shall be authorized to reverse any such transactions or advances of funds in the event that it does not receive good funds with respect thereto, and (ii) nothing in this Indenture shall constitute a waiver of any of Trustee’s rights as a securities intermediary under Uniform Commercial Code § 9-206. [END OF ARTICLE V] HCBOC 031725 Pg. 199 25 ARTICLE VI DISCHARGE OF INDENTURE If, when the Bonds secured hereby become due and payable in accordance with their terms or otherwise as provided in this Indenture, the whole amount of the principal, premium, if any, and interest due and payable with respect to all of the Bonds shall be paid or provision has been made for the payment of the same, together with all other sums payable hereunder, then the right, title and interest of the Trustee in and to the Trust Estate and all covenants, agreements and other obligations of the Corporation to the Trustee and the Owners shall then cease, terminate and become void and be discharged and satisfied. In such event, on the request of the County, the Trustee shall transfer and convey to the County all property assigned or pledged to the Trustee by the Corporation then held by the Trustee pursuant to this Indenture, and the Trustee shall execute such documents as may be reasonably required by the County and shall turn over to the County any surplus in any fund created under this Indenture other than the Rebate Fund and unclaimed funds set aside pursuant to Section 3.8. Outstanding Bonds shall, before the maturity or prepayment date thereof, be deemed to have been paid within the meaning and with the effect expressed in this Article VI if (a) in case said Bonds are to be prepaid on any date before their maturity, the County has given to the Trustee in form satisfactory to the Trustee irrevocable instructions to give on a date in accordance with the provisions of Section 4.2 notice of prepayment of such Bonds on said prepayment date, (b) there has been deposited with the Trustee either money in an amount which shall be sufficient, or Federal Securities, the principal of and the interest on which when due, and without any reinvestment thereof, will provide money which, together with the money, if any, deposited with or held by the Trustee at the same time, sufficient to pay when due the principal, premium, if any, and interest due and to become due with respect to said Bonds on and before the prepayment date or maturity date thereof, as the case may be, and (c) in the event said Bonds are not by their terms subject to prepayment within the next 60 days, the County has given the Trustee in form satisfactory to it (1) irrevocable instructions to give, as soon as practicable in the same manner as the notice of prepayment is given pursuant to Section 4.2, a notice to the Owners of such Bonds that the deposit required by (b) above has been made with the Trustee and that said Bonds are deemed to have been paid in accordance with this Section and stating such maturity or prepayment date on which money is to be available for the payment of the principal, premium, if any, and interest with respect to said Bonds, (2) verification from an independent accountant or other nationally recognized expert selected by the County that the money or Federal Securities deposited with the Trustee will be sufficient to pay when due the principal, premium, if any, and interest due and to become due with respect to the Bonds on and before the prepayment date or maturity date thereof and (3) an opinion of nationally recognized bond counsel selected by the County that, to the extent applicable, such deposit of money or Federal Securities will not adversely affect the exclusion from gross income for federal income tax purposes of interest with respect to the applicable Bonds delivered with the expectation that interest with respect thereto will be excludable from the gross income of the owners thereof for federal income tax purposes. Neither the Federal Securities nor money deposited with the Trustee pursuant to this Article VI or principal or interest payments on any such Federal Securities shall be withdrawn or used for any purpose other than, and such Federal Securities or money shall be held in trust for, the payment of the principal, premium, if any, and interest with respect to said Bonds; provided any cash received from such principal or interest payments on such Federal Securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested in Federal Securities of the type described in clause (b) of this paragraph maturing at the times and in amounts sufficient (together with any other money or Federal Securities then held by the Trustee as described above) to pay when due the principal, premium, if any, and interest to become due with respect to said Bonds on or before such prepayment date or maturity date thereof, as the case may be. At such time as any Bonds shall be deemed paid as aforesaid, such Bonds shall no longer be secured by or entitled to the benefits of this Indenture and the Contract, except for the purpose of exchange and transfer and any payment from such money or Federal Securities deposited with the Trustee. HCBOC 031725 Pg. 200 26 The release of the obligations of the Corporation under this Section is without prejudice to the rights of the Trustee to be paid reasonable compensation for all services rendered by it hereunder and all its reasonable expenses, charges and other disbursements incurred with respect to the administration of the trust hereby created and the performance of its powers and duties hereunder. [END OF ARTICLE VI] HCBOC 031725 Pg. 201 27 ARTICLE VII DEFAULTS AND REMEDIES Section 7.1 Events of Default. If any of the following events occur, it is hereby defined as and shall be deemed an “Event of Default” under this Indenture: (a) Default in the payment of the principal or premium, if any, with respect to any Bond when the same becomes due and payable, whether at the stated maturity thereof or as a sinking fund prepayment or on proceedings for prepayment for which notice of such prepayment was not a conditional notice. (b) Default in the payment of any installment of interest with respect to any Bond when the same becomes due and payable. (c) The occurrence of an “Event of Default” as provided in Section 12.1 of the Contract. Section 7.2 Remedies on Default. (a) On the occurrence and continuance of an Event of Default, the Trustee may, and shall, if required in writing by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the County, declare the obligations of the County as to the principal and interest components of Installment Payments and the aggregate principal amount of the Bonds and the accrued interest with respect thereto to be immediately due and payable, whereupon they will, without further action, become due and payable. (b) The provisions of the preceding paragraph are subject to the condition that if, after the principal with respect to any of the Installment Payments and the Bonds has been so declared to be due and payable, and before the earlier of (1) the exercise of rights granted under the Deed of Trust or (2) to the extent permitted by applicable law and Section 2.3, any judgment or decree for the payment of the money due has been obtained or entered as hereinafter provided, the defaulting party (the “Defaulting Party”) shall cause to be deposited with the Trustee a sum sufficient to pay all matured installments of the principal and interest with respect to all Bonds which have become due otherwise than by reason of such declaration (with interest on such overdue installments of principal and interest, to the extent permitted by law, at the rate or rates per annum borne by the Bonds) and such amount as is sufficient to cover reasonable compensation and reimbursement of expenses payable to the Trustee, and all Events of Default hereunder other than nonpayment of the principal or interest with respect to the Bonds which have become due by said declaration have been remedied, then, in every such case, such Event of Default shall be deemed waived and such declaration and its consequences rescinded and annulled, and the Trustee shall promptly give written notice of such waiver, rescission or annulment to the Defaulting Party and shall give notice thereof by first class mail to all Owners; but no such waiver, rescission and annulment shall extend to or affect any subsequent Event of Default or impair any right or remedy consequent thereon. The provisions of paragraph (a) are further subject to the condition that any waiver of any event of default under the Contract and a rescission and annulment of its consequences shall constitute a waiver of the corresponding Event of Default under this Indenture and a rescission and annulment of the consequences thereof. If notice of such event of default under the Contract has been given as provided herein, the Trustee shall promptly give written notice of such waiver, rescission or annulment to the Defaulting Party and shall give notice thereof by first class mail to all Owners; but no such waiver, rescission and annulment shall extend to or affect any subsequent Event of Default or impair any right or remedy consequent thereon. HCBOC 031725 Pg. 202 28 (c) On the occurrence and continuance of any Event of Default and on the written direction of Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding and receipt of indemnity to the Trustee’s satisfaction, the Trustee shall, to the extent permitted by Section 2.3 and applicable law, in its own name and as the Trustee of an express trust: (1) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Owners, and require the Defaulting Party to carry out any agreements with or for the benefit of the Owners and to perform its or their duties under the Contract and this Indenture, provided that any such remedy may be taken only to the extent permitted under the applicable provisions of the Contract or this Indenture, as the case may be; (2) take whatever action at law or in equity is permissible and may appear necessary or desirable to enforce its rights against the Defaulting Party or the Mortgaged Property held as security therefor, including exercising its rights under the Deed of Trust. No right or remedy is intended to be exclusive of any other rights or remedies, but each and every such right or remedy shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or by statute. If any Event of Default has occurred and if requested in writing by the Owners of a majority in aggregate principal amount of Bonds then Outstanding and indemnified as provided in Section 8.1(m), the Trustee is obligated to exercise, to the extent permitted by applicable law and subject to Section 2.3, such one or more of the rights and powers conferred by this Section as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owners. Section 7.3 Majority of Owners May Control Proceedings. The Owners of a majority in aggregate principal amount of the Bonds then Outstanding have the right, at any time, to the extent permitted by law, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture, or for the appointment of a receiver, and any other proceedings hereunder; provided that such direction shall not be otherwise than in accordance with the provisions hereof. The Trustee is not required to act on any direction given to it pursuant to this Section until the indemnity described in Section 8.1(m) of this Indenture is furnished to it by such Owners. Section 7.4 Rights and Remedies of Owners. No Owner has any right to institute any suit, action or proceeding in equity or at law for the enforcement of this Indenture or for the execution of any trust hereof or for the appointment of a receiver or any other remedy hereunder, unless (1) an Event of Default has occurred of which the Trustee has been notified as provided in Section 8.1(h), or of which by said Section it is deemed to have notice, (2) such default has become an Event of Default as defined in Section 7.1, and the Owners of not less than a majority in aggregate principal amount of Bonds then Outstanding have made written request to the Trustee, have offered reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceedings in its own name and have offered to the Trustee indemnity as provided in Section 8.1(m), (3) the Trustee thereafter has declined to comply with such request or fails or refuses to exercise the powers hereinbefore granted, or to institute such action, suit or proceeding in its own name within sixty (60) days after its receipt of such written request, and (4) no direction inconsistent with such request has been given to the Trustee during such 60-day period by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding; and such notification, request and offer of indemnity are hereby declared in every case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of this Indenture, and to any action or cause of action for the enforcement of this Indenture, or for the appointment of a receiver or for any other remedy hereunder; it being understood and intended that no one or more Owners have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Indenture by his action or to enforce any right hereunder except in the manner herein provided and that all proceedings at HCBOC 031725 Pg. 203 29 law or in equity shall be instituted, had and maintained in the manner herein provided and for the equal and ratable benefit of the Owners of all Bonds then Outstanding. Nothing contained in this Indenture shall, however, affect or impair the right of any Owner to enforce the payment of the principal, premium, if any, and interest with respect to any Bond at and after the maturity thereof to the extent permitted by Section 2.3 and applicable law. Section 7.5 Trustee May Enforce Rights Without Bonds. All rights of action and claims under this Indenture or any of the Bonds Outstanding hereunder may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or proceedings relative thereto; and any suit or proceeding instituted by the Trustee shall be brought in its name as the Trustee for itself or as representative of the Owners of the Bonds, without the necessity of joining as plaintiffs or defendants any Owners of the Bonds, and any recovery of judgment is for the ratable benefit of the Owners of the Bonds, subject to the provisions of this Indenture. Section 7.6 Delay or Omission No Waiver. No delay or omission of the Trustee or of any Owner to exercise any right, remedy, or power accruing on any Event of Default shall exhaust or impair any such right or power or shall be construed to be a waiver of any such Event of Default, or acquiescence therein; and every right, remedy, and power given by this Indenture, to the extent permitted by applicable law and subject to Section 2.3, may be exercised from time to time and as often as may be deemed expedient, by the Trustee or the Owners, as the case may be. Section 7.7 No Waiver of One Default to Affect Another. No waiver of any default or Event of Default hereunder, whether by the Trustee or the Owners, shall extend to or affect any subsequent or any other then existing default or Event of Default shall impair any rights or remedies consequent thereon. Section 7.8 Discontinuance of Proceedings on Default; Position of Parties Restored. If the Trustee or any Owner of Bonds has proceeded to enforce any right under this Indenture and such proceedings have been discontinued or abandoned for any reason, or have been determined adversely to the Trustee or such Owner, then and in every such case the Corporation, the County, the Trustee and the Owners shall, subject to any determination in such proceeding, be restored to their former positions and rights hereunder with respect to the Trust Estate, and all rights, remedies and powers of the Trustee and the Owners of the Bonds shall continue as if no such proceedings had been instituted. Section 7.9 Waivers of Events of Default. The Trustee may in its discretion waive any Event of Default hereunder and its consequences, and notwithstanding anything else to the contrary contained in this Indenture shall do so on the written request of the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding; provided, however, that there shall not be waived without the consent of the Owners of 100% of the Bonds then Outstanding as to which the Event of Default exists (a) any Event of Default in the payment of the principal or premium with respect to any Outstanding Bonds at the date of maturity or mandatory sinking fund prepayment specified therein or (b) any default in the payment when due of the interest with respect to any such Bonds, unless before such waiver or rescission, all arrears of interest and all arrears of payments of principal and premium, if any, then due, as the case may be (both with interest on all overdue installments at the rate or rates borne by the Bonds), and all expenses of the Trustee in connection with such default have been paid or provided for. In case of any such waiver, then and in every such case the Corporation, the County, the Trustee and the Owners shall be restored to their former positions and rights hereunder, respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair any right consequent thereon. Section 7.10 Application of Money. All money received by the Trustee pursuant to any right given or action taken under the provisions of this Article VII (other than amounts in the Rebate Fund) shall, after payment of the costs and expenses of the proceedings resulting in the collection of such money and of HCBOC 031725 Pg. 204 30 the outstanding fees of the Trustee and the costs, expenses, liabilities and advances incurred or made by the Trustee, including the reasonable fees, costs, and expenses of its agents and counsel, be deposited in the Bond Fund and applied as follows: (a) Unless the principal with respect to all of the Bonds have become or have been declared due and payable, all such money shall be applied: FIRST: To the payment to the persons entitled thereto of all installments of interest then due with respect to the Bonds, in the order of the maturity of the installments of such interest beginning with the earliest such maturity and, if the amount available is not sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or privilege; and SECOND: To the payment to the persons entitled thereto of the unpaid principal and premium, if any, with respect to any of the Bonds which have become due (other than Bonds matured or called for prepayment for the payment of which money is held pursuant to the provisions of this Indenture), in the order of their due dates and beginning with the earliest due date, and, if the amount available is not sufficient to pay in full the principal of such Bonds due on any particular date, then to the payment, ratably, according to the amount of principal due on such date, to the persons entitled thereto without any discrimination or privilege; and THIRD: To the payment to the persons entitled thereto of interest on overdue installments of principal, premium, if any, and interest, to the extent permitted by law, and if the amount available is not sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such particular installment, to the persons entitled thereto, without any discrimination or privilege; and FOURTH: To be held for the payment to the persons entitled thereto, as the same become due, of the principal, premium, if any, and interest with respect to the Bonds which may thereafter become due in accordance with the terms of this Indenture. (b) If the principal with respect to all of the Bonds has become due or has been declared due and payable, all such money shall be applied to the payment of the principal and interest then due and unpaid with respect to the Bonds, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amounts due, respectively, for principal and interest, to the persons entitled thereto without any discrimination or privilege, with interest on overdue installments of interest or principal, to the extent permitted by law. Whenever money is to be applied pursuant to the provisions of this Section 7.10, such money shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such money available for application and the likelihood of additional money becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) on which such application HCBOC 031725 Pg. 205 31 is to be made and on such date interest with respect to the amounts of principal to be paid on such dates, and for which money is available, shall cease to accrue. The Trustee shall also select a new record date for such payment date. The Trustee shall give such notice as it may deem appropriate of the deposit with it of any such money and of the fixing of any such record date and payment date, and shall not be required to make payment to the Owner of any Bond until such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Whenever the principal, premium, if any, and interest with respect to all of the Bonds have been paid under the provisions of this Section 7.10 and all expenses and charges of the Trustee have been paid, any balance remaining in the Bond Fund shall be paid to the County. Section 7.11 Notice of Events of Default. If an Event of Default occurs of which the Trustee has or is deemed to have notice under Section 8.1(h), the Trustee shall give immediate notice thereof to the Corporation and the County. [END OF ARTICLE VII] HCBOC 031725 Pg. 206 32 ARTICLE VIII CONCERNING THE TRUSTEE Section 8.1 Duties of the Trustee. The Trustee hereby accepts the trusts imposed on it by this Indenture and agrees to perform said trusts (including, without limitation, all duties delegated and all rights assigned to the Trustee by the Corporation under the Contract), but only on and subject to the following express terms and conditions, and no implied covenants or obligations shall be read into this Indenture against the Trustee: (a) The Trustee, before the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an Event of Default has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise as a reasonable and prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) The Trustee may execute any of the trusts or powers hereof and perform any of its duties by or through attorneys, agents, or receivers appointed with due care, and shall not be responsible for any negligence or misconduct on the part of any such attorney, agent or receiver so appointed, and shall be entitled to act on an Opinion of Counsel concerning all matters of trust hereof and the duties hereunder, and may in all cases pay such reasonable compensation to all such attorneys, agents, receivers and employees as may reasonably be employed in connection with the trusts hereof. The Trustee may act on an Opinion of Counsel and shall not be responsible for any loss or damage resulting from any action or nonaction taken by or omitted to be taken in good faith in reliance on such Opinion of Counsel, provided that the Trustee is under a duty to examine such Opinion of Counsel to determine whether it conforms to the requirements of this Indenture. (c) The Trustee is not responsible for any recital herein or in the Bonds (except in respect to the execution of the certificate of authentication on behalf of the Trustee) or for the recording or rerecording, filing or refiling of the Contract or this Indenture or of any supplements thereto or hereto or instruments of further assurance; or insuring the security for the Bonds or the Mortgaged Property; or to effect or maintain insurance; or to renew any policies of insurance; or to inquire as to the sufficiency of any polices of insurance carried by the County; or collecting any insurance money; or for the validity of the execution by the Corporation of this Indenture or of any supplements hereto or instruments of further assurance; or for the sufficiency of the security for the Bonds executed and delivered hereunder or intended to be secured hereby; or for the value of or title to the Mortgaged Property; or for the maintenance of the security for the Bonds, and the Trustee is not bound to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of the Corporation or the County, except as provided herein; but the Trustee may require of the Corporation or the County full information and advice as to the performance of the covenants, conditions and agreements aforesaid. The Trustee has no obligation to perform any of the duties of the County under the Contract; and the Trustee is not responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with Article V. The Trustee shall not be responsible for filing or for the sufficiency or accuracy of any financing statements initially filed to perfect security interests granted under this Indenture. The Trustee shall file a continuation statement with respect to each UCC financing statement relating to the trust estate filed by the County at the time of the issuance of the Bonds; provided that a copy of the filed initial financing statement is timely delivered to the Trustee in connection with the execution and delivery of the Bonds. In addition, unless the Trustee shall have been notified in writing by the County that any such initial filing or description of collateral was or has HCBOC 031725 Pg. 207 33 become defective, the Trustee shall be fully protected in relying on such initial financing statement and description in filing any financing or continuation statement or modification thereto pursuant to this section. (d) The Trustee may become the Owner of Bonds with the same rights which it would have if not the Trustee. (e) The Trustee shall be fully protected in acting on any notice, request, consent, certificate, order, affidavit, letter, or other paper or document believed to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken by the Trustee under this Indenture on the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner of any Bond is conclusive and binding on all future Owners of the same Bond and on any Bonds executed and delivered in place thereof, provided that the Trustee is under a duty to examine such documents to determine whether it conforms to the requirements of this Indenture. (f) As to the existence or nonexistence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, unless other evidence thereof is specifically prescribed, the Trustee may, in the absence of bad faith on its part, rely on a certificate signed on behalf of the Corporation by a Corporation Representative, or on behalf of the County by a County Representative or such other person as may be designated for such purpose by a certified resolution, as sufficient evidence of the facts therein contained, and, before the occurrence of a default of which the Trustee has been notified as provided in subsection (h) of this Section or of which by said subsection it is deemed to have notice, is also at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but in no case is bound to secure the same, provided that the Trustee is under a duty to examine such certificate to determine whether it conforms to the requirements of this Indenture. (g) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and the Trustee is not answerable for other than its negligence or willful misconduct. (h) The Trustee is not required to take notice or be deemed to have notice of any default hereunder except failure by the County or the Corporation to cause to be made any of the payments to the Trustee required to be made by Article III hereof, unless a Trustee Representative is specifically notified of such default in writing by the Corporation or the County or by the Owners of at least 25% in aggregate principal amount of Bonds then Outstanding, and all notices or other instruments required by this Indenture to be delivered to the Trustee, must, to be effective, be delivered at the corporate trust office of the Trustee identified in Section 10.9, and in the absence of such written notice so delivered or express knowledge to the contrary, the Trustee may conclusively assume there is no default except as aforesaid. (i) All money received by the Trustee shall, until used or applied or invested as herein provided, be held in trust in the manner and for the purposes for which they were received but need not be segregated from other funds except to the extent required by this Indenture or law. The Trustee is not under any liability for interest on any money received hereunder. (j) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, have the right, but are not required, to inspect any and all of the property pledged herein, including all books, papers and records of the Corporation or the County pertaining to the Mortgaged Property. HCBOC 031725 Pg. 208 34 (k) The Trustee is not required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. (l) Notwithstanding anything in this Indenture contained, the Trustee has the right, but is not required, to demand in respect of the execution and delivery of any Bonds, the withdrawal of any cash, or any action whatsoever within the purview of this Indenture, any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, in addition to that by the terms hereof required, as a condition of such action by the Trustee deemed desirable for the purpose of establishing the right of the Corporation or the County to the execution and delivery of any Bonds, the withdrawal of any cash, or the taking of any other action by the Trustee. (m) Before taking any action hereunder (except for the acceleration of the Bonds under Section 7.2(a)) the Trustee may require that satisfactory indemnity be furnished to it by the Owners for the reimbursement of all expenses which it may incur and to protect it against all liability, except liability which may result from its negligence or willful misconduct, by reason of any action so taken. (n) The Trustee may use the services of an agent to carry out the duties, responsibilities and obligations required of the Trustee hereunder and where the Trustee is required to act, the agent of the Trustee may act in the place and stead of the Trustee; provided, however, that the use of any agent does not relieve the Trustee of any of its obligations under the Indenture. Where any act is to be performed or any event is to occur under the Indenture at the designated corporate trust office of the Trustee, such act or event may be performed or occur, as the case may be, at the office of the agent of the Trustee. (o) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability (except for the acceleration of the Bonds under Section 7.2(a)) is not assured to it. (p) The Trustee may not serve as the provider of any financial guaranty instrument under this Indenture or any subsequent supplemental indenture. (q) The Trustee is not liable to the Corporation or the County for any loss suffered as a result of or in connection with any investment of funds made by the Trustee in good faith as instructed by or approved by the County. (r) The Trustee is not accountable for the use by the Corporation or the County of the proceeds of the Bonds. (s) The Trustee has no duty or responsibility to examine or review, and has no liability for the contents of, any documents submitted or delivered to any Owner in the nature of a preliminary or final placement memorandum, official statement, offering circular or similar disclosure document and the Trustee shall have no responsibility for compliance with any state or federal securities laws in connection with the Bonds. (t) The Trustee is not liable for any debts contracted or for damages to persons or to personal property injured or damaged, or for salaries or nonfulfillment of contracts, relating to the Mortgaged Property. The Trustee has no duty to inspect the Mortgaged Property or to verify the HCBOC 031725 Pg. 209 35 truthfulness or accuracy of the certifications made by the Corporation with respect to the Trustee’s disbursements for Cost of Acquisition and Construction in accordance with this Indenture and the Contract. (u) The Trustee shall have the right to accept and act upon instructions or directions, including funds transfer instructions, pursuant to this Indenture sent by Electronic Means. As used in this Section, “Electronic Means” means unsecured e-mail as a portable document format (“pdf”) or other replicating image attached to an email, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the Corporation and the County, as applicable, shall provide to the Trustee an incumbency certificate listing designated persons authorized to provide such instructions (“Authorized Officers”), which incumbency certificate shall be amended whenever a person is to be added or deleted from the listing. If the Corporation or the County elects to give the Trustee instructions via Electronic Means and the Trustee in its discretion elects to act upon such instructions, the Trustee’s reasonable understanding of such instructions shall be deemed controlling. The Corporation agrees that the Trustee cannot determine the identity of the actual sender of such instructions and that the Trustee shall conclusively presume that instructions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Corporation shall be responsible for ensuring that only Authorized Officers transmit such instructions to the Trustee, and the Corporation and the Authorized Officers are responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and authentication keys provided by the Trustee. The Trustee shall not be liable for any losses, costs, or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Corporation agrees (i) to assume all risks arising out of the use of such Electronic Means to submit instructions and direction to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions and the risk or interception and misuse by third parties, provided that such unauthorized instructions, interception or misuse was not due to the Trustee’s negligence or the compromise of Trustee’s security systems; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting instructions to the Trustee and that there may be more secure methods of transmitting instructions than the method(s) selected by the Corporation; (iii) that the security procedures (if any) to be followed in connection with its transmission of instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) that it will notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. Section 8.2 Fees and Expenses of Trustee. The Trustee is entitled to payment and reimbursement for its reasonable fees for its services rendered hereunder as and when the same become due and all expenses (including, but not limited to, attorney’s fees, costs and expenses) reasonably and necessarily made or incurred by the Trustee in connection with such services as and when the same become due as provided in Section 4.7 of the Contract. Section 8.3 Resignation or Replacement of Trustee. The Trustee may resign by giving written notice to the County, the Corporation and the LGC not less than 60 days before such resignation is to take effect. Such resignation shall take effect only on the appointment of a successor qualified as provided in the third paragraph of this Section 8.3. The Trustee may be removed at any time upon thirty (30) days’ prior notice (1) by the Corporation, at the direction of the County or (2) by an instrument in writing, executed by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding. The Corporation may not, however, remove the Trustee if an Event of Default under this Indenture has occurred and is HCBOC 031725 Pg. 210 36 continuing. No removal will be effective until a successor Trustee qualified as provided in the third paragraph of this Section 8.3 has been appointed and until such appointment has been accepted. If the Trustee resigns or is removed or otherwise becomes incapable of acting, a successor may be appointed by the County, or if there is an “Event of Default” by the County as provided in Section 12.1 of the Contract, by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding by an instrument or concurrent instruments signed by such Owners, or their attorneys-in-fact duly appointed; provided that the Corporation may, by an instrument executed by it, appoint a successor until a new successor is appointed by the Owners as herein authorized. The County, on making such appointment, shall forthwith give notice thereof to each Owner, the LGC and to the Corporation, which notice may be given concurrently with the notice of resignation given by any resigning Trustee. Any successor so appointed by the County shall immediately and without further act be superseded by a successor appointed in the manner above provided by the Owners of a majority in aggregate principal amount of the Bonds Outstanding. If no successor Trustee shall have been so appointed and accepted appointment within 60 days of any resignation, removal, incapability or the occurrence of a vacancy in the office of Trustee in the manner herein provided, the Trustee or any Owner may, at the expense of the County, petition any court of competent jurisdiction for the appointment of a successor Trustee until a successor shall have been appointed as above provided. Subject to Section 8.4, every successor shall always be a bank, trust company or financial institution in good standing, qualified to act hereunder, and having a capital and surplus of not less than $100,000,000. Any successor appointed hereunder shall execute, acknowledge and deliver to the County and to the Corporation an instrument accepting such appointment hereunder and certifying that it is qualified to serve as successor Trustee hereunder, and thereon such successor shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers and trusts of its predecessor in the trust hereunder with like effect as if originally named as Trustee herein; but the Trustee retiring shall, nevertheless, on the reasonable written demand of its successor and the payment of all of its outstanding fees, costs and expenses, execute and deliver an instrument conveying and transferring to such successor, on the trusts herein expressed, all the estates, properties, rights, powers and trusts of the predecessor, which shall duly assign, transfer and deliver to the successor all properties and money held by it under this Indenture. Should any instrument in writing from the County or the Corporation be required by any successor for more fully vesting in and confirming to it, the said deeds, conveyances and instruments in writing shall be made, executed, acknowledged and delivered by the County or the Corporation on request of such successor. The instruments evidencing the resignation or removal of the Trustee and the appointment of a successor hereunder, together with all other instruments provided for in this Section shall be filed and/or recorded by the successor Trustee in each recording office, if any, where this Indenture has been filed or recorded. Section 8.4 Conversion, Consolidation or Merger of Trustee. Any bank, trust company or financial institution (a) into which the Trustee or its successor may be converted or merged, or with which it may be consolidated, (b) resulting from any merger or consolidation to which the Trustee or its successor is a party, or (c) to which it may sell or transfer all or substantially all of its corporate trust business, shall be the successor of the Trustee under this Indenture with the same rights, powers, duties and obligations and subject to the same restrictions, limitations and liabilities as its predecessor, all without the execution or filing of any papers or any further act on the part of any of the parties hereto or thereto, anything herein or therein to the contrary notwithstanding; provided, however, that such merged or successor entity meets the qualifications of a successor Trustee under Section 8.3. If any of the Bonds to be executed and delivered hereunder have been authenticated, but not delivered, any successor Trustee may adopt the certificate of any predecessor Trustee, and deliver the same as authenticated; and, if any of such Bonds have not been HCBOC 031725 Pg. 211 37 authenticated, the Corporation may authenticate the Bond and any successor Trustee may deliver the same in the manner provided in Article II of this Indenture. Section 8.5 Intervention by Trustee. In any judicial proceeding to which the Corporation or the County is a party and which in the opinion of the Trustee and its counsel has a substantial bearing on the interests of Owners of the Bonds, the Trustee may intervene on behalf of Owners of the Bonds, and shall do so if requested in writing by the Owners of at least 25% in aggregate principal amount in Bonds then Outstanding, so long as they have provided satisfactory indemnity pursuant to Section 8.1(m). Section 8.6 E-Verify. The Trustee understands that “E-Verify” is a federal program operated by the United States Department of Homeland Security and other federal agencies, or any successor or equivalent program used to verify the work authorization of newly hired employees pursuant to federal law in accordance with Section 64-25(5) of the General Statutes of North Carolina, as amended. The Trustee uses E-Verify to verify the work authorization of its employees in accordance with Section 64-26(a) of the General Statutes of North Carolina, as amended. The Trustee will require that any subcontractor that it uses in connection with the transactions contemplated by this Indenture certify to such subcontractor's compliance with E-Verify. [END OF ARTICLE VIII] HCBOC 031725 Pg. 212 38 ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS OF THE CONTRACT Section 9.1 Supplemental Indentures Not Requiring Consent of Owners. The Trustee and the Corporation may, with the written consent of the County, but without the consent of, or notice to, the Owners, enter into such indentures supplemental hereto for any one or more or all of the following purposes: (a) To add to the covenants and agreements of the Corporation contained in this Indenture other covenants and agreements to be thereafter observed by the Corporation or to surrender any rights or powers herein reserved to or conferred upon the Corporation which are not contrary to or inconsistent with this Indenture as then in effect; (b) To cure any ambiguity, or to cure, correct or supplement any defect or omission or inconsistent provision contained in this Indenture, or to make any provisions with respect to matters arising under this Indenture or for any other purpose if such provisions are necessary or desirable and do not adversely affect the interests of the Owners; (c) To grant to or confer upon the Trustee for the benefit of the Owners any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Owners or the Trustee which are not contrary to or inconsistent with this Indenture as then in effect or to subject to the pledge and lien of this Indenture additional revenues, properties, or collateral; (d) To modify, alter, supplement or amend this Indenture in such manner as shall permit the qualification of this Indenture, if required, under the Trust Indenture Act of 1939 or, the Securities Act of 1933, as from time to time amended, or any similar federal statute hereafter in effect; (e) To make any other change herein that is determined by the Trustee to be not materially adverse to the interests of the Owners and which does not involve a change requiring consents of specific Owners; or (f) To execute and deliver Additional Bonds as provided in Section 2.11. Section 9.2 Supplemental Indentures Requiring Consent of Owners. Exclusive of supplemental indentures covered by Section 9.1, the written consent of the County and the LGC and the consent of the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding is required for the execution by the Corporation and the Trustee of any indenture or indentures supplemental hereto; provided, however, that (1) if such supplemental indenture will, by its terms, not take effect so long as any Bonds so affected remain Outstanding, the consent of the holders of such Bonds shall not be required and such Bonds shall not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds under this Section, and (2) without the consent of the LGC and the Owners of all the Bonds at the time Outstanding affected thereby nothing herein contained shall permit, or be construed as permitting: (a) A change in the terms of prepayment or maturity of the principal amount of or the interest with respect to any Outstanding Bond, or a reduction in the principal amount of or premium payable on any prepayment of any Outstanding Bond or the rate of interest with respect thereto; (b) The deprivation of the Owner of any Bond then Outstanding of the lien created by this Indenture (other than as originally permitted hereby); HCBOC 031725 Pg. 213 39 (c) A privilege or priority of any Bond or Bonds over any other Bond or Bonds; or (d) A reduction in the aggregate principal amount of the Bonds required for consent to such supplemental indenture. If at any time the County or the Corporation requests the Trustee to enter into such supplemental indenture for any of the purposes of this Section, the Trustee shall, on being satisfactorily indemnified with respect to expenses, cause notice of the proposed execution of such supplemental indenture to be mailed by first class mail to the Owners of the Bonds then Outstanding at the address shown on the registration books maintained by the Trustee (or by such other method as permitted by the Owners). Such notice shall be prepared by the County or the Corporation, shall briefly set forth the nature of the proposed supplemental indenture and shall state that copies thereof are on file at the designated corporate trust office of the Trustee for inspection by all Owners. If, within 60 days or such longer period as is prescribed by the County following the giving of such notice, the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding at the time of the execution of any such supplemental indenture have consented to and approved the execution thereof as herein provided, no Owner has any right to object to any of the terms and provisions contained therein, or in the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Corporation from executing the same or from taking any action pursuant to the provisions thereof. The consent by the purchaser of a series of Additional Bonds constitutes the consent of the Owners of that series of Additional Bonds. Any consent or request by the Owners of any Bond is conclusive and binding on such Owner and on all future Owners of the Bonds and of any Bonds executed and delivered on the transfer of any Bond, whether or not notation of such consent or request is made on the Bond. The Trustee is not obligated to consent to any amendment, change or modification of the Contract or the Deed of Trustee under Section 9.4 or Section 9.5 which affects its rights, duties or immunities thereunder or under this Indenture and prior to giving such consent there shall be delivered to the Trustee an Opinion of Counsel, upon which the Trustee shall conclusively rely, to the effect that such amendment, change or modification is authorized or permitted by the terms of this Indenture. Section 9.3 Execution of Supplemental Indenture. The Trustee is authorized to join with the Corporation in the execution of any such supplemental indenture and to make further agreements and stipulations which may be contained therein, but the Trustee is not obligated to enter into any such supplemental indenture which affects its rights, duties or immunities under this Indenture. Subject to Section 8.1 herein, the Trustee is entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that such supplemental indenture is authorized or permitted by this Indenture and will, upon the execution and delivery thereof, be valid and binding in accordance with its terms. Any supplemental indenture executed in accordance with the provisions of this Article shall thereafter form a part of this Indenture; and all the terms and conditions contained in any such supplemental indenture as to any provision authorized to be contained therein shall be deemed to be part of this Indenture for any and all purposes. In case of the execution and delivery of any supplemental indenture, express reference may be made thereto in the text of the Bonds executed and delivered thereafter, if any, if deemed necessary or desirable by the Trustee. Section 9.4 Amendments to the Contract or the Deed of Trust Not Requiring Consent of Owners. The Corporation and the Trustee may, with the written consent of the County, but without the consent of or notice to the Owners, consent to any amendment, change or modification of the Contract or the Deed of Trust as may be required (a) by the provisions of the Contract, the Deed of Trust or this HCBOC 031725 Pg. 214 40 Indenture; (b) for the purpose of curing any ambiguity, inconsistency, or formal defect or omission in the Contract or the Deed of Trust; (c) to more precisely identify the Mortgaged Property or to add or substitute improvements acquired in accordance with the Contract, the Deed of Trust and this Indenture; (d) to execute and deliver Additional Bonds as provided in Section 2.11; (e) to amend the County’s continuing disclosure obligation as provided in any supplement or amendment to the Contract; or (f) in connection with any other change therein which does not materially adversely affect the interests of the existing Owners. Subject to Section 8.1 herein, the Trustee is entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that such amendment, change or modification of the Contract or the Deed of Trust is authorized or permitted by this Indenture, the Contract and the Deed of Trust and will, upon the execution and delivery thereof, be valid and binding in accordance with its terms. Section 9.5 Amendments to the Contract or the Deed of Trust Requiring Consent of Owners. Except for the amendments, changes or modifications permitted by Section 9.4, neither the Corporation nor the Trustee shall consent to any other amendment, change or modification of the Contract or the Deed of Trust without the giving of notice thereof to the LGC and to the Owners and receipt of consent by the LGC and the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding given and procured as provided in Section 9.2. If the County and the Corporation requests the consent of the Trustee to any such proposed amendment, change or modification of the Contract or the Deed of Trust, the Trustee shall, on being satisfactorily indemnified with respect to expenses, cause notice of such proposed amendment, change or modification to be given in the same manner as provided in Section 9.2. Such notice shall be prepared by the County or the Corporation, shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of the instrument embodying the same are on file at the designated corporate trust office of the Trustee for inspection by all Owners. The consent by the purchaser of a series of Additional Bonds constitutes the consent of the Owners of that series of Additional Bonds. Section 9.6 Consent of Initial Purchaser, Underwriters or Remarketing Agent. Notwithstanding anything in this Indenture to the contrary, (1) any initial purchaser, underwriter or remarketing agent holding any Bonds may, regardless of its intent to sell or distribute such Bonds in the future, consent as the Owner of such Bonds to any amendment or supplemental indenture as required by this Article IX, including any amendment or supplemental indenture that adversely affects the interests of other Owners and (2) any such holder providing its consent under this Section shall not be entitled to receive, nor shall the County be required to provide, any prior notice or other documentation regarding such amendment or supplemental indenture. [END OF ARTICLE IX] HCBOC 031725 Pg. 215 41 ARTICLE X MISCELLANEOUS Section 10.1 Evidence of Signature of Owners and Ownership of Bonds. Any request, consent or other instrument which this Indenture may require or permit to be signed and executed by the Owners may be in one or more instruments of similar tenor, and shall be signed or executed by such Owners in person or by their attorneys appointed in writing. Proof of the execution of any such instrument or of an instrument appointing any such attorney, or the ownership of Bonds is sufficient (except as otherwise herein expressly provided) if made in the following manner, but the Trustee may, nevertheless, in its discretion require further or other proof in cases where it deems the same desirable: (a) The fact and date of the execution by any Owner or his or her attorney of such instrument may be proved by the certificate of any officer authorized to take acknowledgments in the jurisdiction in which he or she purports to act that the person signing such request or other instrument acknowledged to him or her the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before a notary public. (b) The ownership of the Bonds shall be proved by the registration books kept under the provisions of Section 2.9. Any request or consent of the Owner of any Bond binds all future Owners of such Bond in respect of anything done or suffered to be done by the County or the Trustee in accordance therewith. Section 10.2 Covenants of Corporation. The Corporation agrees that the Trustee as assignee of the Corporation under the Contract may enforce, in its name or in the name of the Corporation, all rights of the Corporation and all obligations of the County under the Contract, for and on behalf of the Owners, whether or not the Corporation is in default under this Indenture. The Trustee and the Corporation hereby agree that the Corporation is not obligated to make any payments or to take any other action with respect to the Mortgaged Property under the Contract. Section 10.3 Inspection of the Mortgaged Property. The Trustee and its duly authorized agents have the right, on reasonable notice to the County, at all reasonable times, to examine and inspect the Mortgaged Property. The Trustee and its duly authorized agents shall also be permitted, at all reasonable times, to examine the books, records, reports and other papers of the County with respect to the Mortgaged Property. Before taking any action hereunder or under the Deed of Trust which would result in the Trustee acquiring title to or taking possession of any portion or all of the Mortgaged Property, the Trustee may require such environmental inspections and tests of the Mortgaged Property and other environmental reviews as the Trustee deems necessary and, if the Trustee determines that the taking of title or possession of all or any portion of the Mortgaged Property will expose the Trustee to claims or damages resulting from environmental or ecological conditions in any way relating to the Projects or any activities at the Mortgaged Property, the Trustee may require indemnification prior to taking title to or possession of the Mortgaged Property and the Trustee shall not be required to take any foreclosure action with respect to the Mortgaged Property if it reasonably determines that the approval of a governmental regulator that cannot be obtained is necessary for such foreclosure action. Section 10.4 Parties Interested Herein. Nothing in this Indenture expressed or implied is intended or shall be construed to confer on, or to give to any person other than the County, the Corporation, the Trustee and the Owners, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof; and all the covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Corporation or the Trustee shall be for the sole and exclusive benefit of the County, the Corporation, the Trustee and the Owners. HCBOC 031725 Pg. 216 42 Section 10.5 Titles, Headings and Captions. The titles, captions and headings of the articles, sections and subdivisions of this Indenture have been inserted for convenience of reference only and shall in no way modify or restrict any of the terms or provisions hereof. Section 10.6 Severability. If any provision of this Indenture, other than Section 2.3, is held invalid, inoperative, or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. If any one or more of the provisions provided in this Indenture shall be construed to be held invalid, inoperative, or unenforceable, the parties hereto shall, in the alternative, agree to replace such provision with a lawful provision which most nearly approximates the provision held to be invalid, inoperative, or unenforceable. Section 10.7 Governing Law. This Indenture shall be construed, interpreted, governed and enforced in accordance with the laws and Constitution of the State without regard to conflict of law principles. Section 10.8 Execution in Counterparts, Electronic Signatures. This Indenture may be executed in any number of counterparts, by manual, facsimile, digital, electronic or .pdf file signatures, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument. An executed copy of this Indenture delivered by Electronic Means will be deemed to have the same legal effect as delivery of a manual signed copy of this Indenture. This Indenture and related documents may be sent and stored by Electronic Means. Section 10.9 Notices. All notices, certificates or other communications are sufficiently given and shall be deemed given when delivered or mailed by certified or registered mail, postage prepaid (or, with respect to notices delivered to the County, the Corporation or the Trustee, by Electronic Means with confirmation of delivery receipt (with an automatic “read receipt” or similar notice not constituting an acknowledgement of an email receipt for purposes of this Section)), as follows: If to the County: County of Harnett, North Carolina 420 McKinney Parkway Lillington, North Carolina 27546 Attention: Finance Officer If to the Corporation: Harnett County Public Facilities Corporation c/o County of Harnett, North Carolina 420 McKinney Parkway Lillington, North Carolina 27546 Attention: Finance Officer If to the Trustee: U.S. Bank Trust Company, National Association 214 North Tryon Street, 27th Floor Charlotte, North Carolina 28202-1078 CN-NC-H27A Attention: Shawna L. Hale All notices, approvals, consents, requests and any communications hereunder must be in writing (provided that any communication sent to Trustee hereunder must be in the form of a document that is signed manually or by way of a digital signature provided by DocuSign (or such other digital signature provider as specified in writing to Trustee by the authorized representative), in English. The County agrees to assume all risks arising out of the use of using digital signatures and electronic methods to submit communications to Trustee, including without limitation the risk of Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. HCBOC 031725 Pg. 217 43 The County, the Corporation, and the Trustee may, by written notice, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent, including electronic delivery. Section 10.10 Payments Due on Holidays. If the date for making any payment or the last day for performance of any act or the exercising of any right, as provided in this Indenture, is not a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nominal date provided in this Indenture and no interest shall accrue on the payment so deferred during the intervening period. Section 10.11 Corporation, County, and Trustee Representatives. Whenever under the provisions hereof the approval of the Corporation, the County or the Trustee is required, or the County, the Corporation or the Trustee is required to take some action at the request of the other, unless otherwise provided, such approval or such request shall be given for the Corporation by a Corporation Representative, for the County by a County Representative and for the Trustee by a Trustee Representative, and the Corporation, the County and the Trustee shall be authorized to act on any such approval or request. Section 10.12 USA Patriot Act. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust or other legal entity, the Trustee asks for documentation to verify its formation and existence as a legal entity. The Trustee may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation. [END OF ARTICLE X] [SIGNATURES BEGIN ON FOLLOWING PAGES] HCBOC 031725 Pg. 218 SIGNATURE PAGE 1 IN WITNESS WHEREOF, the Corporation and the Trustee have caused this Indenture to be executed in their respective corporate names as of the date first above written. HARNETT COUNTY PUBLIC FACILITIES CORPORATION By: [____] President [SIGNATURES CONTINUED ON FOLLOWING PAGES] HCBOC 031725 Pg. 219 SIGNATURE PAGE 2 [COUNTERPART SIGNATURE PAGE TO THE INDENTURE] U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By: Shawna L. Hale Vice President HCBOC 031725 Pg. 220 A-1 EXHIBIT A FORM OF 2025 BONDS R- $ UNITED STATES OF AMERICA STATE OF NORTH CAROLINA LIMITED OBLIGATION BOND (COUNTY OF HARNETT, NORTH CAROLINA), SERIES 2025 EVIDENCING A PROPORTIONATE UNDIVIDED INTEREST IN RIGHTS TO RECEIVE CERTAIN REVENUES PURSUANT TO AN INSTALLMENT FINANCING CONTRACT BETWEEN THE HARNETT COUNTY PUBLIC FACILITIES CORPORATION AND THE COUNTY OF HARNETT, NORTH CAROLINA INTEREST RATE MATURITY DATE DATED DATE CUSIP % [MATURITY DATE] 1, 20__ [April 17], 2025 41333T____ REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: DOLLARS THIS CERTIFIES THAT THE REGISTERED OWNER (named above), or registered assigns, has a proportionate undivided interest in rights to receive certain revenues, as described below, pursuant to a certain Installment Financing Contract dated as of April 1, 2025 (which agreement as from time to time amended is referred to herein as the “Contract”), between the HARNETT COUNTY PUBLIC FACILITIES CORPORATION (the “Corporation”) and the COUNTY OF HARNETT, NORTH CAROLINA, a political subdivision of the State of North Carolina (the “County”). The interest of the Owner of this Bond (this “2025 Bond”) is secured as provided in the Indenture of Trust dated as of April 1, 2025 (the “Indenture”) between the Corporation and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (the “Trustee”), for the registered owners of the 2025 Bonds (the “Owners”), by which the rights (with certain exceptions) of the Corporation, under the Contract, have been assigned by the Corporation to the Trustee for the benefit of the Owners. Pursuant to the Contract and the Indenture, the Owner hereof is entitled to receive, solely out of and to the extent available from the sources hereinafter identified, on the Maturity Date stated above (or earlier as hereinafter provided), the Principal Sum stated above, and interest with respect thereto from the Dated Date (shown above) at the interest rate per annum stated above computed on the basis of a 360-day year of twelve 30-day months, payable commencing on [_______ 1, 2025 and semiannually thereafter on _______ 1 and _______ 1 in each year] until payment in full of such Principal Sum. Principal with respect to this 2025 Bond is payable in lawful money of the United States of America at the designated corporate trust office of the Trustee, or that of its successor. Interest with respect to this 2025 Bond will be paid by the Trustee by check or wire transfer mailed on the Interest Payment Date to each Owner as its name and HCBOC 031725 Pg. 221 A-2 address appear on the register kept by the Trustee at the close on the fifteenth day (whether or not a Business Day) of the month next preceding an Interest Payment Date (the “Record Date”). At the written request of any Owner of at least $1,000,000 in aggregate principal amount of the 2025 Bonds, principal and interest may be payable by wire transfer at the address specified in writing by the Owner by the Record Date. As long as Cede & Co. or another DTC nominee is the registered owner of this 2025 Bond, the Trustee shall make all payments with respect to this 2025 Bond by wire transfer in immediately available funds. The 2025 Bonds will be delivered by means of a book-entry system with no physical distribution of 2025 Bonds made to the public. One 2025 Bond for each maturity will be executed and delivered to The Depository Trust Company (“DTC”) and immobilized in its custody. A book-entry system will be employed, evidencing ownership of the 2025 Bonds in principal amounts in the denomination of $5,000 or any integral multiple thereof (“Authorized Denominations”), with transfers of beneficial ownership effected on the records of DTC and its participants pursuant to rules and procedures established by DTC. While DTC or its nominee is the registered owner of this 2025 Bond , payments of principal and interest will be made to DTC or its nominee in accordance with existing arrangements by wire transfer in immediately available funds. The County and the Trustee will not be responsible or liable 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 2025 Bonds or (b) the County determines that the continuation of the book entry system of evidence and transfer of ownership of the 2025 Bonds would adversely affect the interests of the County or the Beneficial Owners of the 2025 Bonds, the County will discontinue the book entry system with DTC. If the County fails to identify another qualified securities depository to replace DTC, the Trustee will authenticate and deliver replacement 2025 Bonds in the form of fully registered 2025 Bonds in accordance with DTC rules and procedures. The County, the Corporation, and the Trustee do not have any responsibility or obligations with respect to (a) the accuracy of any records maintained by DTC; (b) the payment by DTC of any amount due to any Beneficial Owners in respect of the principal and interest with respect to the 2025 Bonds; (c) the delivery or timeliness of delivery by DTC of any notice which is required or permitted under the terms of the Contract or Indenture to be given to Owners; (d) the selection of Owners to receive payments in the event of any partial prepayment of the 2025 Bonds; or (e) any consent given or other action taken by DTC, or its nominee. EACH 2025 BOND EVIDENCES A PROPORTIONATE UNDIVIDED INTEREST IN THE RIGHT TO RECEIVE CERTAIN REVENUES UNDER THE CONTRACT. THE OBLIGATION OF THE COUNTY TO MAKE INSTALLMENT PAYMENTS AND ADDITIONAL PAYMENTS IS A LIMITED OBLIGATION OF THE COUNTY, PAYABLE SOLELY FROM CURRENTLY BUDGETED APPROPRIATIONS OF THE COUNTY; DOES NOT CONSTITUTE A GENERAL OBLIGATION OR OTHER INDEBTEDNESS OF THE COUNTY WITHIN THE MEANING OF THE CONSTITUTION OF THE STATE OF NORTH CAROLINA; AND DOES NOT CONSTITUTE A DIRECT OR INDIRECT PLEDGE OF THE FAITH AND CREDIT OR TAXING POWER OF THE COUNTY WITHIN THE MEANING OF THE CONSTITUTION OF THE STATE OF NORTH CAROLINA. NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE COUNTY IN ANY ACTION FOR ANY BREACH OF THE CONTRACT, THIS INDENTURE OR THE DEED OF TRUST, AND THE TAXING POWER OF THE COUNTY IS NOT AND MAY NOT BE PLEDGED DIRECTLY OR INDIRECTLY OR CONTINGENTLY TO SECURE ANY MONEY DUE UNDER THIS INDENTURE, THE CONTRACT OR THE DEED OF TRUST. Each capitalized, undefined term used herein has the meaning ascribed thereto in the Contract and the Indenture. HCBOC 031725 Pg. 222 A-3 This 2025 Bond is one of the Bonds evidencing proportionate undivided interests in rights to receive certain revenues (the “Revenues”) pursuant to the Contract and the Indenture, in an aggregate principal amount of $[AMOUNT] executed and delivered under the Indenture to finance the construction, equipping, and furnishing of school facilities in the County (the “2025 Projects” and, initially, the “Projects”), including, but not limited to, Flatwoods Middle School (the “School”). The 2025 Bonds and any Additional Bonds that may be executed and delivered under the Indenture will be parity obligations. Under the Contract, the Corporation has agreed to advance to the County the Purchase Price, the proceeds from which will be used to pay the capital costs of the Projects, and the County has agreed to pay directly to the Trustee semiannual payments (the “Installment Payments”) in repayment of the Purchase Price, the proceeds of which are required by the Indenture to be distributed by the Trustee to the payment of the principal, premium, if any, and interest with respect to the Bonds. In addition to the Installment Payments, the County has agreed to make certain other payments (the “Additional Payments”) sufficient to pay the fees and expenses of the Trustee and the Corporation and other expenses required to be paid by the County under the Contract. The County has covenanted in the Contract to pay the Installment Payments and the Additional Payments as they become due and has executed and delivered as security for that payment obligation the Deed of Trust, Security Agreement and Fixture Filing dated as of April 1, 2025 (the “Deed of Trust”) from the County to the Deed of Trust trustee named therein for the benefit of the Corporation with respect to the site of the School and all improvements thereon (the “Mortgaged Property”). If the Contract is terminated by reason of an Event of Default, the principal amount of this 2025 Bond and the interest with respect thereto will be payable from such money, if any, as may be available for such purpose, including any money received by the Trustee from the sale, lease, sublease or other disposition of the Mortgaged Property pursuant to the Deed of Trust. The Contract may also be terminated if the County exercises its option to prepay in full the Purchase Price. If the County prepays the Purchase Price in full, the proceeds thereof are required to be used to pay the principal, premium, if any, and interest with respect to the Bonds. Reference is hereby made to the Contract and the Indenture for a description of the rights, duties and obligations of the County, the Corporation, the Trustee and the Owners, the terms on which the 2025 Bonds are secured, the terms and conditions on which the 2025 Bonds will be deemed to be paid at or before maturity or prepayment of the 2025 Bonds on the making of provision for the full or partial payment thereof, and the rights of the Owners on the occurrence of an Event of Default or circumstances under which Additional Bonds can be executed and delivered. Subject to the execution and delivery of any Additional Bonds in accordance with the Indenture, if the County pays all Installment Payments due under the Contract through [MATURITY DATE] 1, [2045] and otherwise complies with its obligations under the Contract through such date, the Indenture and the Contract provide that the Trustee shall release the lien of the Indenture on [MATURITY DATE] 1, [2045]. The 2025 Bonds are executed and delivered solely as fully registered Bonds without coupons in Authorized Denominations. Except as set forth above, this 2025 Bond is transferable by the Owner hereof in person or by his or her attorney duly authorized in writing on the registration books kept at the designated corporate trust office of the Trustee on surrender of this 2025 Bond together with a duly executed written instrument of transfer satisfactory to the Trustee. On such transfer, new fully registered 2025 Bonds or Bonds without coupons of the same maturity, of Authorized Denominations, for the same aggregate principal amount, will be executed and delivered to the transferee in exchange herefor, all on payment of the charges and subject to the terms and conditions set forth in the Indenture. The Trustee shall deem the person in whose name this 2025 Bond is registered as the absolute owner hereof, whether or not this 2025 Bond shall be overdue, HCBOC 031725 Pg. 223 A-4 for the purpose of receiving payment and for all other purposes, and neither the County nor the Trustee shall be affected by any notice to the contrary. [to update at pricing as necessary] The 2025 Bonds maturing on or before [MATURITY DATE] 1, 2035 are not subject to optional prepayment before their maturities. The 2025 Bonds maturing on or after [MATURITY DATE] 1, 20 36 are subject to optional prepayment in whole or in part on any date on or after [MATURITY DATE] 1, 2035 at the option of the County, at the prepayment price equal to 100% of the principal amount of such 2025 Bonds to be prepaid, together with accrued interest to the date fixed for prepayment. [The 2025 Bonds maturing on [MATURITY DATE] 1, 20__ (the “Term Bonds”) are subject to mandatory sinking fund prepayment on [MATURITY DATE] 1 in the years and in the amounts set forth below from the principal components of the Installment Payments required to be paid by the County under the Contract with respect to each such prepayment date, at a prepayment price equal to 100% of the principal amount thereof to be prepaid, together with accrued interest with respect thereto to the prepayment date, without premium, as follows: YEAR AMOUNT _______________ *Maturity. At its option, to be exercised on or before the 45th day next preceding any mandatory prepayment date, the County may receive a credit in respect of its mandatory prepayment obligation for any portion of the Term Bonds which before said date has been prepaid (otherwise than through mandatory prepayment under the Indenture) and canceled by the Trustee and not theretofore applied as a credit against any mandatory prepayment obligation. Each such portion of the Term Bonds so prepaid and canceled by the Trustee shall be credited by the Trustee at 100% of the principal amount thereof against the Installment Payment obligation corresponding to such mandatory prepayment date. To the extent that the aggregate principal amount of such portion of the Term Bonds exceeds the Installment Payment obligation on such mandatory prepayment date, any excess over such amount shall be credited against future Installment Payment obligations with respect to the Term Bonds, as directed by the County, and the principal amount of the Term Bonds to be prepaid shall be accordingly reduced. The County must on or before the 45th day next preceding each such mandatory prepayment date furnish the Trustee with its certificate indicating to what extent the provisions of the preceding paragraph are to be availed with respect to such mandatory prepayment.] In the case of any optional prepayment in part, the 2025 Bonds to be prepaid shall be prepaid in such order as the County shall select and within the same maturity as selected by DTC pursuant to its rules and procedures or, if the book-entry system with respect to the 2025 Bonds is discontinued as provided in the Indenture, by lot within a maturity in such manner as the Trustee in its discretion may determine. If a 2025 Bond subject to prepayment is in a denomination larger than the minimum Authorized Denomination, a portion of such 2025 Bond may be prepaid, but only in a principal amount such that the unprepaid portion of such 2025 Bond is equal to an Authorized Denomination. For any 2025 Bond in a HCBOC 031725 Pg. 224 A-5 denomination of more than the minimum Authorized Denomination, the Trustee shall treat each such 2025 Bond as representing a single 2025 Bond in the minimum Authorized Denomination plus that number of 2025 Bonds that is obtained by dividing the remaining principal amount of such 2025 Bond by the minimum Authorized Denomination. If it is determined that one or more, but not all, of the Authorized Denominations of principal amount represented by any 2025 Bond is to be called for prepayment, then, on notice of intention to prepay such Authorized Denominations of principal amount with respect to such 2025 Bond, the Owner of such 2025 Bond, on surrender of such 2025 Bond to the Trustee for payment of the principal amount with respect to such 2025 Bond, will be entitled to receive new 2025 Bonds in the aggregate principal amount of the unprepaid balance of the principal amount with respect to such 2025 Bond. New 2025 Bonds representing the unprepaid balance of the principal amount with respect to such 2025 Bonds will be executed and delivered to the Owner thereof without charge therefor. If the Owner of any 2025 Bond of a denomination greater than the amount being prepaid fails to present such 2025 Bond to the Trustee for payment and exchange as aforesaid, such 2025 Bond will, nevertheless, become due and payable on the date fixed for prepayment to the extent of the denomination being prepaid and to that extent only. Notice of prepayment identifying the 2025 Bonds or portions thereof to be prepaid shall be given by the Trustee in writing not less than 30 days nor more than 60 days before the date fixed for prepayment by Electronic Means or by first class mail, postage prepaid (or, in the case of notice to DTC, by registered or certified mail or otherwise in accordance with DTC’s then-existing rules and procedures) (1) to DTC or its nominee or to the then-existing securities depositories, or (2) if DTC or its nominee or another securities depository is no longer the Owner of the 2025 Bonds, to the then-registered Owners of the 2025 Bonds to be prepaid at their addresses appearing on the registration books maintained by the Trustee, (3) to the LGC, and (4) to the Municipal Securities Rule Making Board (the “MSRB”) via its Electronic Municipal Marketplace Access (“EMMA”) system (or any successor thereto); provided however, that the Trustee shall have no liability to any party in connection with any failure to timely file any notice with the MSRB via its EMMA system (or any successor thereto) and the sole remedy for any such failure shall be an action by the Owners in mandamus for specific performance or similar remedy to compel performance. Notwithstanding the foregoing, (1) if notice is given, the failure to receive an appropriate notice shall not affect the validity of the proceedings for such prepayment, (2) the failure to give any such notice or any defect therein shall not affect the validity of the proceedings for the prepayment of the 2025 Bonds or portions thereof with respect to which notice was correctly given, and (3) the failure to give any such notice to the LGC or the MSRB, or any defect therein, shall not affect the validity of any proceedings for the prepayment of the 2025 Bonds. Any notice mailed as provided herein shall be conclusively presumed to have been duly given, whether or not the Owner receives the notice. In the case of an optional prepayment of the 2025 Bonds, the prepayment notice may state that (1) it is conditioned upon the deposit of money with the Trustee on the prepayment date at the time and in an amount equal to the amount necessary to effect the prepayment and such notice will be of no effect unless such money is so deposited, and (2) the County retains the right to rescind the prepayment notice on or prior to the scheduled prepayment date, and such notice and optional prepayment shall be of no effect if such money is not so deposited or if the notice is rescinded as described in the Indenture. The Indenture permits amendments thereto and to the Contract and the Deed of Trust on the agreement of the Corporation and the Trustee and with the approval of the Owners of not less than a HCBOC 031725 Pg. 225 A-6 majority or, in certain instances, 100% in aggregate principal amount of the Bonds at the time Outstanding. The Indenture also contains provisions permitting the Corporation and the Trustee to enter into amendments to the Indenture and the Contract without the consent of the Owners of the Bonds for certain purposes. Any consent or request by the Owner of this 2025 Bond is conclusive and binding on such Owner and on all future Owners of this 2025 Bond and of any Bond executed and delivered on the transfer of this 2025 Bond, whether or not notation of such consent or request is made on this 2025 Bond. This 2025 Bond is executed and delivered with the intent that the laws of the State of North Carolina shall govern its legality, validity, enforceability and construction, without regard to conflict of law principles. This 2025 Bond is not entitled to any right or benefit under the Indenture, or valid or obligatory for any purposes until this 2025 Bond has been authenticated by the execution by the Trustee, or its successors as Trustee, of the certificate of authentication inscribed hereon. [SIGNATURES BEGIN ON THE FOLLOWING PAGE] HCBOC 031725 Pg. 226 7 IN WITNESS WHEREOF, the HARNETT COUNTY PUBLIC FACILITIES CORPORATION has caused this 2025 Bond to be executed with the manual or facsimile signature of its President as attested with the manual or facsimile signature of its Secretary as of the Dated Date set forth above. HARNETT COUNTY PUBLIC FACILITIES CORPORATION By: [_______] President ATTEST: [_______] Secretary HCBOC 031725 Pg. 227 8 CERTIFICATE OF AUTHENTICATION This is one of the Limited Obligation Bonds (County of Harnett, North Carolina), Series 2025 evidencing a proportionate undivided interest in rights to receive within-mentioned Revenues pursuant to the within-mentioned Contract. U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By: Shawna L. Hale Vice President Dated: [April 17], 2025 HCBOC 031725 Pg. 228 [FORM OF ASSIGNMENT] ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please print or typewrite Name and Address, including Zip Code, and Federal Taxpayer Identification or Social Security Number of Assignee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ________________________________________________________________________________ Attorney to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: _______________ Signature guaranteed by: NOTICE: Signature must be guaranteed by a Participant in the Securities Transfer Agent Medallion Program (“Stamp”) or similar program. NOTICE: The signature to this assignment must correspond with the name as it appears on the face of the within Bond in every particular, without alteration, enlargement or any change whatever. TRANSFER FEE MAY BE REQUIRED HCBOC 031725 Pg. 229 July 1, 2024 - June 30, 2025 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun TOTAL AVG. Front Desk - Check-in Appointments 1134 1273 1328 1340 1000 1006 1037 877 8995 1124.4 Health Clinics Adult Women Wellness Clinic 3 3 1 5 5 1 1 1 20 2.5 Care Coordination for Children (CC4C)151 148 152 147 152 147 143 114 1154 144.25 Child Health - Sick Clinic 100 174 195 219 161 186 179 136 1350 168.75 Child Health - Well Clinic 176 177 110 99 98 97 117 114 988 123.5 County Employee Health Clinic 122 118 114 115 131 123 147 128 998 124.75 Family Planning 146 149 127 147 114 119 126 104 1032 129 Immunizations 251 408 1035 809 226 228 212 167 3336 417 COVID Vaccines 15 5 0 124 47 13 10 1 215 26.875 Maternity (Prenatal Clinic)219 171 199 181 145 139 158 133 1345 168.13 OB Care Management (OBCM)160 200 180 179 178 196 201 182 1476 184.5 Postpartum Home Visits 0 0 0 0 1 0 2 0 3 0.375 Refer/Repeat Pap 0 0 1 3 0 0 1 9 14 1.75 STD Services 91 80 86 76 73 66 51 50 573 71.625 TB Services 64 58 54 25 35 50 95 65 446 55.75 Welcome Baby Home Visits 0 0 0 0 1 0 2 0 3 0.375 Total Services 1498 1691 2254 2129 1367 1365 1445 1204 0 0 0 12953 1619.1 Reportable Disease Cases Tuberculosis 0 0 0 0 0 0 1 0 1 0.125 HIV - (Quarterly report)0 1 1 1 1 0 0 0 4 0.5 AIDS - (Quarterly report)0 0 0 0 0 0 0 0 0 0 SYPHILIS - (Quarterly report)5 7 1 7 1 3 0 1 25 3.125 OTHER STD's 18 26 25 19 22 27 25 12 174 21.75 Other (salmonella, campylobacter, etc)11 4 6 7 4 5 1 7 45 5.625 Total Services 34 38 33 34 28 35 27 20 249 31.125 Health Education Outreach 161 309 364 440 110 278 277 250 2189 273.63 Laboratory Clients 1414 1269 1409 1436 1434 1136 1191 1144 10433 1304.1 Laboratory Tests 903 812 873 790 833 670 719 751 6351 793.88 HIV Tests 132 112 141 110 115 88 86 77 861 107.63 WIC Active Participation 3343 3498 3502 3496 3521 3511 3495 24366 3480.9 Vital Statistics Births In County 2 4 6 5 2 4 2 1 26 3.25 Births Out of County X X X X X X X X 0 0 Deaths 50 56 58 47 47 59 79 70 466 58.25 Environmental Health Applications Received 111 140 100 109 104 89 121 124 898 112.25 Permits Issued 70 90 51 86 64 49 71 61 542 67.75 Completions Issued 76 115 68 120 93 82 72 82 708 88.5 Repair Permits Applied 3 12 8 13 8 3 9 5 61 7.625 Permits Denied 0 0 0 0 0 0 0 0 0 0 Site Visits 142 137 115 153 98 88 108 126 967 120.88 Food and Lodging Establishments Inspected/Reinspected 70 91 84 88 67 72 54 43 569 71.125 Visits /Construction/Critical 60 70 49 61 43 37 44 36 400 50 Complaints 4 7 3 9 3 6 4 1 37 4.625 Private Water Supplies Well Applications Received 1 6 0 4 6 3 4 4 28 3.5 updated 7/08/2022 updated 03-05-2025 Activities Summary Harnett County Department of Public Health Item 10A HCBOC 031725 Pg. 230 Item 10BHCBOC 031725 Pg. 231 Item 10C HCBOC 031725 Pg. 232 HCBOC 031725 Pg. 233 HCBOC 031725 Pg. 234 HCBOC 031725 Pg. 235 HCBOC 031725 Pg. 236 HCBOC 031725 Pg. 237 Item 10D HCBOC 031725 Pg. 238 HCBOC 031725 Pg. 239 HCBOC 031725 Pg. 240 HCBOC 031725 Pg. 241 HCBOC 031725 Pg. 242 STATE OF NORTH CAROLINA DEPARTMENT OF TRANSPORTATION ROY COOPER J.R. “JOEY” HOPKINS GOVERNOR SECRETARY Mailing Address: NC DEPARTMENT OF TRANSPORTATION DIVISION SIX / DISTRICT TWO POST OFFICE BOX 1150 FAYETTEVILLE, NC 28302 Telephone: (910) 364-0601 Fax: (910) 437-2529 Customer Service: 1-877-368-4968 Website: www.ncdot.gov Location: 600 SOUTHERN AVENUE FAYETTEVILLE, NC 28306 March 4, 2025 Mrs. Melissa Capps Clerk Harnett County Board of Commissioners Post Office Box 759 Lillington, North Carolina 27546 Subject: Secondary Road Addition To Whom It May Concern: This is in reference to a petition submitted to this office requesting street(s) in Harnett County be placed on the State’s Secondary Road System. Please be advised that these street(s) have been investigated, and our findings are that the below listed street(s) are eligible for addition to the State System. Ballard Woods Subdivision SR1364 Joseph Alexander Dr It is our recommendation that the above-named street(s) be placed on the State’s Secondary Road System. If you and your Board concur with our recommendation, please submit a resolution to this office. Sincerely, Christopher Jones Engineering Specialist I Item 10E HCBOC 031725 Pg. 243 HCBOC 031725 Pg. 244 strong roots • new growth HARNETT COUNTY NORTH CAROLINA RESOLUTION BE IT RESOLVED that Harnett County Board of Commissioners does hereby, by proper execution of this document, request that the North Carolina Department of Transportation add to the State’s Secondary Road System the below listed streets. Ballard Woods Subdivision • SR1364 Joseph Alexander Dr Duly adopted this 17th day of March, 2025. HARNETT COUNTY BOARD OF COMMISSIONERS _______________________________ Matthew Nicol, Chairman ATTEST: _________________________________ Melissa D. Capps, Clerk HCBOC 031725 Pg. 245