Supplement dated November 14, 2017 to Preliminary Limited Offering Memorandum dated October 26, 2017 $14,660,000* $670,000* PUBLIC FINANCE AUTHORITY PUBLIC FINANCE AUTHORITY EDUCATION REVENUE BONDS TAXABLE EDUCATION REVENUE BONDS (UWHARRIE CHARTER ACADEMY PROJECT) (UWHARRIE CHARTER ACADEMY PROJECT) SERIES 2017A SERIES 2017B This Supplement dated November 14, 2017 to Preliminary Limited Offering Memorandum dated October 26, 2017 (this "Supplement") supplements the Preliminary Limited Offering Memorandum dated October 26, 2017 (the "Original PLOM") relating to the captioned bonds to reflect: • modifications to the Indenture and Loan Agreement that: create a repair and replacement fund in the Indenture and require the Borrower to fund such repair and replacement fund monthly based on a capital needs assessment to be conducted once every five years commencing no later than June 30, 2022; modify the additional Indebtedness incurrence tests applicable to the Borrower for the incurrence of Long-Term Parity Indebtedness, Short-Term Indebtedness, Non-Recourse Indebtedness, and Subordinated Indebtedness; permit the Trustee or the Beneficial Owners of not less than a majority of the Bonds then Outstanding to reject an Independent Consultant selected by the Borrower in certain circumstances as described below; and require monthly reporting on construction progress in connection with the Construction Project; • updated and additional information regarding the Charter Modification, the application for which was submitted on November 6, 2017, and on which the Borrower has been informed that the Charter School Advisory Board will make its recommendation in December 2017 and the State Board of Education will render its decision thereon in January 2018, • newly available 2017 SAT composite data by school district, for public school students in the State of North Carolina, and for public school students in the United States, and • an updated anticipated date of issuance of the Series 2017 Bonds of November 22, 2017. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Original PLOM. Repair and Replacement Fund; Capital Needs Assessment The Indenture as described in the Original PLOM is modified to create a Repair and Replacement Fund from which the Trustee may disburse funds for the repair and/or replacement of capital items or to fund capital improvements to the New Facility: The Trustee shall deposit into the Repair and Replacement Fund as and when received (i) all moneys delivered to it for deposit therein as provided by Section 5.01(c) of the Loan Agreement, and (ii) all other moneys received by the Trustee when accompanied by directions from an * Preliminary, subject to change 1 Authorized Representative of the Borrower that such moneys are to be paid into the Repair and Replacement Fund. Amounts on deposit in the Repair and Replacement Fund may be disbursed by the Trustee from time to time to the Borrower upon receipt of a requisition therefor to pay for the repair and/or replacement of capital items or to fund capital improvements to the New Facility in the form provided in Exhibit E of the Loan Agreement signed by an Authorized Representative of the Borrower. The Loan Agreement as described in the Original PLOM is modified to require the Borrower to fund the Repair and Replacement Fund monthly based on a Capital Needs Assessment to be conducted once every five years: The Borrower shall cause an Independent Consultant to complete a capital needs assessment of the Borrower projecting the Borrower's capital needs for the New Facility and the total cost thereof for the five year period commencing on the immediately following July 1 (each a "Capital Needs Assessment") no later than June 30, 2022, and every fifth anniversary thereafter as long as the Bonds are Outstanding. The Borrower shall pay or cause to be paid to the Trustee on the fifteenth day of each month, commencing July 15, 2022, for deposit into the Repair and Replacement Fund, the Repair and Replacement Fund Contribution or the Modified Repair and Replacement Fund Contribution, as applicable (each as defined below). The total cost set forth in a Capital Needs Assessment less the amount then on deposit in the Repair and Replacement Fund, divided by 60, shall be the "Repair and Replacement Fund Contribution" for such five-year period; provided, however, that in the event (i) the Borrower pays all or a portion of the cost of a capital need projected in the Capital Needs Assessment from a source of funds other than the Repair and Replacement Fund, the Repair and Replacement Fund Contribution for the remainder of the applicable five year period shall be decreased by the amount of such projected cost that is paid from such other source of funds divided by the number of Repair and Replacement Fund Contribution payments remaining in the applicable five year period; or (ii) a draw is made upon the Repair and Replacement Fund in excess of the cost for a capital need projected in the Capital Needs Assessment or in any amount for a capital need not projected in the Capital Needs Assessment, the Repair and Replacement Fund Contribution for the subsequent 12-month period shall be increased by the excess amount of such draw or the total amount of such unanticipated draw, as applicable, divided by 12 (the Repair and Replacement Fund Contribution as modified by either clause (i) or clause (ii), the "Modified Repair and Replacement Fund Contribution"). As a result of the foregoing changes to the Indenture and the Loan Agreement, the risk related to the absence of a repair and replacement fund described in the Original PLOM under the heading "BONDHOLDERS' RISKS – Risks of Real Estate Investment – Absence of Repair and Replacement Fund is no longer applicable and such heading and the text included therein are hereby deleted in their entirety. Incurrence of Additional Long-Term Parity Indebtedness, Short-Term Indebtedness, Non-Recourse Indebtedness, and Subordinated Indebtedness The Loan Agreement as described in the Original PLOM is modified so that the Borrower must meet the historical pro forma or historical and projected Debt Service Coverage Ratio requirements as set forth below to incur additional Long-Term Indebtedness secured on a parity basis with the Bonds: The Borrower may incur additional Long-Term Indebtedness secured on a parity basis by the Liens on the Premises and the security interest in the Pledged Revenues (subject to the terms of the USDA Documents) if any of the following tests is met: (i) (A) Historical Coverage on Outstanding Debt. Delivery to the Trustee of a certificate of an Authorized Representative of the Borrower stating that, for the Borrower's most recently 2 completed Fiscal Year immediately preceding the issuance of the Long-Term Indebtedness, the Borrower achieved a Debt Service Coverage Ratio equal to at least 1.20 to 1.0; and (B) Projected Coverage for Long-Term Indebtedness. Delivery to the Trustee of a report of an Independent Consultant selected by the Borrower stating that the Debt Service Coverage Ratio for each of the first two consecutive Fiscal Years following the incurrence of such Long-Term Indebtedness or, if such Long-Term Indebtedness is being issued to finance improvements, equipment or new facilities, the first two consecutive Fiscal Years after such improvements, equipment or new facilities are placed in service, is projected to be at least 1.20 to 1 (taking into account the proposed additional Long-Term Indebtedness and any Long-Term Indebtedness to be refinanced thereby and provided that, such projected Net Income Available for Debt Service shall be adjusted to provide for any Eliminated Expenses and for projected revenues and expenses anticipated as the result of any real or personal property acquired, constructed, or completed with the proceeds of any such Long-Term Indebtedness); or (ii) Alternate Coverage for Additional Debt. In lieu of the requirements described above, the Borrower may deliver to the Trustee a certificate of an Authorized Representative of the Borrower stating that, based on the audited results of the operations for the most recently completed Fiscal Year, the Net Income Available for Debt Service (taking into account Eliminated Expenses) equals at least 1.20 times Maximum Annual Debt Service for all parity Long-Term Indebtedness then Outstanding plus the proposed additional Long-Term Indebtedness immediately following the completion of the related project being financed. The Loan Agreement as described in the Original PLOM is modified to limit the aggregate Short-Term Indebtedness, Non-Recourse Indebtedness and Subordinated Indebtedness the Borrower may have outstanding at any time to the greater of $500,000 or 5% of the Borrower's operating revenues for the last preceding Fiscal Year for which audited financial statements have been prepared: The Borrower may incur Short-Term Indebtedness, Non-Recourse Indebtedness, and Subordinated Indebtedness; provided, that in no event shall the aggregate principal amount of all Short-Term Indebtedness, Non-Recourse Indebtedness and Subordinated Indebtedness outstanding at any time exceed the greater of $500,000 or 5% of the Borrower's operating revenues for the last preceding Fiscal Year for which audited financial statements have been prepared. Right to Reject Independent Consultant The Loan Agreement as described in the Original PLOM is modified to provide the right for the Trustee or the Beneficial Owners of not less than a majority of the Bonds then Outstanding to reject an Independent Consultant selected by the Borrower within 30 days of such selection by the Borrower in connection with the Debt Service Coverage Ratio and Days Cash on Hand covenants and the Long-Term Indebtedness incurrence test: Upon the selection of an Independent Consultant as required by Sections 8.05(f), 8.05(g), or 8.13(b) of this Loan Agreement, the Borrower shall cause a notice of the selection of such Independent Consultant, in the form attached hereto as Exhibit C (the "Consultant Notice"), including the name of such Independent Consultant and a brief description of such Independent Consultant to be filed with EMMA.