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<br /> SECURITY
<br /> The payment by the County of the principal of and interest on the 2026A 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 2026A 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 2026A 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, 2018 (as previously
<br /> supplemented and amended, the "Existing Deed of Trust"), granting a lien of record on the sites of the
<br /> County's Government Services Annex located in Hillsborough,North Carolina(the"Government Services
<br /> Annex"), the County's Link Center (the "Link Center"), the County District Attorney's office building
<br /> located in Hillsborough, North Carolina (the "District Attorney's Building"),the County's Northern
<br /> Campus located in Hillsborough, North Carolina (the "Northern Campus"), the County's Meadowlands
<br /> Emergency Operations Center located in Hillsborough, North Carolina (the "Emergency Operations
<br /> Center"),the County's Southern Campus located in Chapel Hill,North Carolina(the"Southern Campus"),
<br /> and the County's Emergency Medical Services building located in Efland, North Carolina (the "Efland
<br /> EMS Center"), and the real estate improvements thereon and appurtenances thereto (collectively, the
<br /> "Existing Mortgaged Property"), all as more particularly described in the Existing Deed of Trust subject
<br /> only to Permitted Encumbrances(as defined in Appendix C hereto).
<br /> As security for the Bonds and in connection with the issuance of the 2026A 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 /> #5 dated as of June 1, 2026 (the "Fifth Deed of Trust Supplement"), supplementing the Existing Deed of
<br /> Trust(as so supplemented,the"Modified Deed of Trust"),which extends the lien of the Existing Deed of
<br /> Trust to include a lien of record on the sites of the Orange County Justice Center located in Hillsborough,
<br /> North Carolina(the "Justice Center"), and the County's planned Crisis Diversion Center in Hillsborough,
<br /> North Carolina(the"Crisis Diversion Center"),and the real estate improvements thereon and appurtenances
<br /> thereto(collectively,the"2026A Mortgaged Property"and,together with the Existing Mortgaged Property,
<br /> the"Mortgaged Property"), subject only to Permitted Encumbrances.
<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, 2018.
<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 2026A Bonds and the Prior Bonds,
<br /> subject to the rights of the owners of any other Bonds. No assurance can be given that any such proceeds
<br /> will be sufficient to pay the principal of and the interest on the Bonds. In addition,no deficiency judgment
<br /> can be rendered against the County if the proceeds from any such foreclosure sale(together with other funds
<br /> that may be held by the Trustee under the Trust Agreement) are insufficient to pay the Bonds in full. The
<br /> 2026A Bonds do not constitute a pledge of the County's faith and credit within the meaning of any
<br /> constitutional provision. See the caption "SECURITY AND SOURCES OF PAYMENT OF 2026A
<br /> BONDS"herein.
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