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SECURITY
<br /> The payment by the County of the principal of and interest on the 2025 Bonds is limited to fiends
<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 2025 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 2025 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 I , 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 " Whiffed 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 "), New Hope Elementary School
<br /> located in Chapel Hill , North Carolina ("New Hope Elementary School") , Pathways Elementary School
<br /> located in Hillsborough , North Carolina ("Pathways Elementary School "), Orange High School located in
<br /> Hillsborough , North Carolina ("Orange High School "), and Ephesus Elementary School located in Chapel
<br /> Hill , North Carolina (" Ephesus Elementary School "), and the real estate improvements thereon and
<br /> appurtenances thereto, all as more particularly described in the Existing Deed of Trust (collectively, the
<br /> "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 2025 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 /> #3 dated as of June 1 , 2025 (the "Third 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 2025 Bonds ,
<br /> The Modified Deed of Trust authorizes future obligations evidenced by Additional Bonds as I
<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 2025 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 2025
<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 2025 BONDS" herein .
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