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SECURITY
<br /> The payment by the County of the principal of and interest on the 2024 Bonds is limited to funds
<br /> appropriated for that purpose by the Board of Commissioners for the County in its sole discretion, except
<br /> to the extent payable from Bond proceeds , investment earnings , Net Proceeds related to casualty or
<br /> condemnation proceeds, or amounts derived from the enforcement of remedies on default.
<br /> As security for the 2024 Bonds, the Prior Bonds and any additional bonds issued under the Trust
<br /> Agreement on a parity therewith (the "Additional Bonds " and, together with the 2024 Bonds and the Prior
<br /> Bonds , the "Bonds "), the County has executed and delivered to a deed of trust trustee (the "Deed of Trust
<br /> Trustee ") , for the benefit of the Trustee, a Deed of Trust dated as of June 1 , 2021 (as previously
<br /> supplemented and amended, the "Existing Deed of Trust"), granting a lien of record on the sites of the
<br /> County ' s Whitted Building located in Hillsborough, North Carolina (the "Whitted Building"), the County ' s
<br /> Blackwood Farm Park located in Hillsborough, North Carolina (the "Blackwood Farm Park"), Culbreth
<br /> Middle School located in Chapel Hill, North Carolina (" Culbreth Middle School "), the Orange County
<br /> Main Library located in Hillsborough, North Carolina (the " Orange County Library"), Orange Middle
<br /> School located in Hillsborough, North Carolina (" Orange Middle School"), Hillsborough Elementary
<br /> School located in Hillsborough, North Carolina ("Hillsborough Middle School "), New Hope Elementary
<br /> School located in Chapel Hill, North Carolina ("New Hope Elementary School ") , Pathways Elementary
<br /> School located in Hillsborough, North Carolina ("Pathways Elementary School"), Orange High School
<br /> located in Hillsborough, North Carolina (" Orange High School") , and Ephesus Elementary School located
<br /> in Chapel Hill, North Carolina ("Ephesus Elementary School"), and the real estate improvements thereon
<br /> and appurtenances thereto, all as more particularly described in the Existing Deed of Trust (collectively,
<br /> the "Mortgaged Property") , subject only to Permitted Encumbrances ( as defined in Appendix C hereto) .
<br /> As security for the Bonds and in connection with the issuance of the 2024 Bonds , the County will
<br /> execute and deliver to the Deed of Trust Trustee, for the benefit of the Trustee, a Deed of Trust Supplement
<br /> #2 dated as of June 1 , 2024 (the " Second Deed of Trust Supplement"), supplementing the Existing Deed of
<br /> Trust (as so supplemented, the "Modified Deed of Trust"), to provide that the Modified Deed of Trust shall
<br /> also secure the 2024 Bonds .
<br /> The Modified Deed of Trust authorizes future obligations evidenced by Additional Bonds as
<br /> described below, to be secured by the Modified Deed of Trust, provided that the total amount of present
<br /> and future obligations secured by the Modified Deed of Trust at any one time does not exceed $200 , 000 , 000
<br /> and such future obligations are incurred not later than 30 years from June 1 , 2021 .
<br /> In addition, the County will grant to the Trustee a lien on and security interest in all moneys held
<br /> by the Trustee in the funds and accounts created under the Trust Agreement .
<br /> If a default occurs under the Trust Agreement, the Trustee is authorized to direct the Deed of Trust
<br /> Trustee to foreclose on the Mortgaged Property and apply the proceeds received as a result of any such
<br /> foreclosure to the payment of the amounts due to the owners of the 2024 Bonds and the Prior Bonds, subject
<br /> to the rights of the owners of any other Bonds . No assurance can be given that any such proceeds will be
<br /> sufficient to pay the principal of and the interest on the Bonds . In addition, no deficiency judgment can be
<br /> rendered against the County if the proceeds from any such foreclosure sale (together with other funds that
<br /> may be held by the Trustee under the Trust Agreement) are insufficient to pay the Bonds in full . The 2024
<br /> Bonds do not constitute a pledge of the County ' s faith and credit within the meaning of any constitutional
<br /> provision . See the caption " SECURITY AND SOURCES OF PAYMENT OF 2024 BONDS " herein .
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