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Section 602. Moneys held for the credit of the Dormitory System Bond and Interest Sinking Fund Account of 1963 and moneys held for the credit of the Dormitory System Repair and Replacement Reserve Account of 1963 may be invested by the Board in direct obligations of, or obligations the principal of and the interest on which are unconditionally guaranteed by, the United States Government which shall mature, or which shall be subject to redemption by the holder thereof at the option of such holder, or later than eighteen (18) months after the date of such investment. In the event that the moneys held for the credit of the Construction Account shall at any time exceed the disbursements to be made therefrom on account of the Project during the next ensuing ninety (90) days as estimated by the Business Manager of The University of North Carolina at Chapel Hill, such excess may be deposited by the Board in time deposits in banks which are members of the Federal Deposit Insurance Corporation or may be invested by the Board in direct obligations of, or obligations the principal of and the interest on which are guaranteed by, the United States Government which shall mature not later than eighteen (18) months after the date of such investment and which shall be subject to redemption at any time by the holder thereof at the option of such holder. Obligations so purchased and time deposits so made shall be deemed at all times to be a part of such Fund or Account and such obligations shall be valued in terms of current market value as of June 30 and December 31 of each year. The interest accruing thereon and any profit realized from such investment shall be credited to such Fund or Account and any loss resulting from such investment shall be charged to such Fund or Account. The Board shall sell at the best price obtainable or present for payment or redemption any obligations so acquired whenever it shall be necessary so to do in order to provide moneys to meet any payment from such Fund or Account. Neithe the Board nor any member of the Board shall be liable or responsible for any loss resulting from any such investment.

ARTICLE VII.

Particular Covenants

Section 701. The Board covenants that it will promptly pay the principal of and the interest on each and every bond issued under the provisions of this Resolution at the places, on the dates and in the manner specified herein and in said bonds and in the coupons, if any, appertaining thereto, according to the true intent and meaning thereof. Such principal and interest are payable solely from the Net Revenues of the Dormitory System, and said Revenues are hereby pledged to the payment thereof in the manner and to the extent hereinabove particularly specified. Nothing in the bonds or in this Resolution shall be deemed to constitute the bonds a debt of the State of North Carolina or a pledge of the faith and credit of the State, nor shall the bonds ever be or become a charge against the State of North Carolina.

Section 702. The Board covenants that it will forthwith proceed to construct the Project in conformity with law and all requirements of all governmental authorities having jurisdiction thereof, that it will complete such construction with all expedition practicable, that the Project will be undertaken and developed in an economical manner and that the Project will not be of elaborate or extravagant design.

The Board covenants that (a) all work on the Project will be done under contract and every opportunity will be given for free, open and competitive bidding for each and every construction, material and equipment contract; that it will give such publicity by advertisements or calls for bids by it for the furnishing to it of work, labor, materials and equipment as required by applicable law and as will provide adequate competition; that each construction contractor will be required to furnish a performance bond in an amount at least equal to one hundred per centum (100%) of the contract price as security for the faithful performance of his contract and a payment bond in an amount not less than fifty per centum (50%) of the contract price or as otherwise prescribed by law, as security for the payment of all persons performing labor or furnishing materials for the Project in connection with such construction contracts; and that each

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