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together with the funds then on deposit in the said Sinking Fund, as shall be sufficient to pay the interest due on May 1 and the principal and interest due on November 1 on the outstanding Bonds and to maintain a debt service reserve in said Sinking Fund Account equal to at least $435, 000. Provided, however, that:

(1) The amounts of such semi-annual transfers, beginning on or before April 15, 1966, shall be increased by an amount equal to one and thirty-five hundredths (1.35) times the average annual requirements for interest and principal on the "University of North Carolina Dormitory System Revenue Bonds of 1963, Series F".

(2) The amounts of such semi-annual transfers shall be further increased by an amount equal to one and thirty-five hundredths (1.35) times the average annual requirements for interest and principal on any additional Series of parity bonds issued in accordance with the provisions of Special Conditions (i) and (j) hereof, beginning twenty-nine and one-half (29-1/2) months after the date of any such additional Series of parity bonds.

Until the funds and/or investments in the "Dormitory System Bond and Interest Sinking Fund Account of 1963" are sufficient to meet the interest on all then outstanding Bonds due on the next succeeding interest payment date, one-half of the principal on all then outstanding Bonds due within the next succeeding twelve (12) months, plus a Debt Service Reserve in an amount sufficient to pay the interest and principal on all then outstanding Bonds due within the next succeeding two (2) fiscal years; and, thereafter, on or before each April 15 and October 15, such sums from said source as shall be sufficient to meet the interest on all then outstanding Bonds due on the next succeeding interest payment date, one-half of the principal on all then outstanding Bonds due within the next succeeding twelve (12) months, and to maintain the Debt Service Reserve in an amount sufficient to pay the interest and principal on all then outstanding Bonds due within the next succeeding two (2) fiscal years.

It is provided, however, that nothing herein shall be construed to prevent the Borrower from depositing, or causing to be deposited, to the credit of the "Dormitory System Bond and Interest Sinking Fund Account of 1963" net revenues of the Dormitory System or any other funds legally available to the Borrower for such purpose, in excess of the requirements of this Condition.

(f) The Borrower covemants and agrees, as soon as the provisions of Special Conditions (a) and (b) above have been complied with, to establish as a trust fund with the bank or trust company to be designated in the Bond Resolution and maintain, so long as any of the Bonds are outstanding, a separate Account called the "University of North Carolina Dormitory System Repair and Replacement Reserve Account of 1963" (hereinafter sometimes referred to as the "Dormitory System Repair and Replacement Reserve Account of 1963"), into which shall be deposited:

(1) All funds and/or investments then on hand in the "University of North Carolina Building Maintenance and Equipment Reserve Account" provided for by Section 503 and maintained under Section 504 of the revised Resolution under which the "University of North Carolina Dormitory Revenue Bonds - Series 1956", dated November 1, 1956, being refunded thereby, were issued.

(2) All funds and/or investments then on hand in the "University of North Carolina Dormitory Repair and Replacement Reserve Account of 1960" provided for by Section 503 and maintained under Section 504 of the Resolution under which the "University of North Carolina Dormitory Revenue Bonds of I960. Series A, B, and C", dated November 1, 1960, being refunded hereby, were issued.

Thereafter, the Borrower further covenants and agrees that, on or before the close of such fiscal year beginning with the fiscal year immediately following the fiscal year in which the Debt Service Reserve Requirements for the "Dormitory System Bond and Interest Sinking Fund Account of 1963", as prescribed by the provisions of Special Condition (e) above have first been met, and after making the semi-annual deposits into said Sinking Fund Account thereafter prescribed by said Special Condition (e), that it will deposit to the credit of the "Dormitory System Repair and Replacement Reserve Account of 1963" the sum of $52,000 to be secured from the

368

together with the funds then on deposit in the said Sinking Fund, as shall
be sufficient to pay the interest due on May 1 and the principal and interest
due on November 1 on the outstanding Bonds and to maintain a debt service
reserve in said Sinking Fund Account equal to at least $435, 000. Provided,
however, that:
(1)

The amounts of such semi-annual transfers, beginning on or before
April 15, 1966, shall be increased by an amount equal to one and
thirty-five hundredths (1.35) times the average annual requirements
for interest and principal on the "University of North Carolina
Dormitory System Revenue Bonds of 1963, Series F".

(2)

The amounts of such semi-annual transfers shall be further increased
by an amount equal to one and thirty-five hundredths (l. 3 5) times
the average annual requirements for interest and principal on any
additional Series of parity bonds issued in accordance with the
provisions of Special Conditions (i) and (j) hereof, beginning
twenty-nine and one-half (29-1/2) months after the date of any such
additional Series of parity bonds.

Until the funds and/or investments in the "Dormitory System Bond and
Interest Sinking Fund Account of 1963" are sufficient to meet the interest
on all then outstanding Bonds due on the next succeeding interest payment
date, one-half of the principal on all then outstanding Bonds due within the
next succeeding twelve (12) months, plus a Debt Service Reserve in an
amount sufficient to pay the interest and principal on all then outstanding
Bonds due within the next succeeding two (2) fiscal years; and, thereafter,
on or before each April 15 and October 15, such sums from said source as
shall be sufficient to meet the interest on all then outstanding Bonds due on
the next succeeding interest payment date, one-half of the principal on all then
outstanding Bonds due within the next succeeding twelve (12) months, and to
maintain the Debt Service Reserve in an amount sufficient to pay the
interest and principal on all then outstanding Bonds due within the next succeed­
ing two (2) fiscal years.
It is provided, however, that nothing herein shall be construed to prevent
the Borrower from depositing, or causing to be deposited, to the credit
of the "Dormitory System Bond and Interest Sinking Fund Account of 1963"
net revenues of the Dormitory System or any other funds legally available
to the Borrower for such purpose, in excess of the requirements of this
Condition.
(f) The Borrower covemants and agrees, as soon as the provisions of
Special Conditions (a) and (b) above have been complied with, to
establish as a trust fund with the bank or trust company to be designated
in the Bond Resolution and maintain, so long as any of the Bonds are
outstanding, a separate Account called the "University of North Carolina
Dormitory System Repair and Replacement Reserve Account of 1963"
(hereinafter sometimes referred to as the "Dormitory System Repair
and Replacement Reserve Account of 1963"), into which shall be
deposited:
(1) All funds and/or investments then on hand in the "University of
North Carolina Building Maintenance and Equipment Reserve
Account" provided for by Section 503 and maintained under
Section 504 of the revised Resolution under which the "University
of North Carolina Dormitory Revenue Bonds - Series 1956",
dated November 1, 1956, being refunded thereby, were issued.
(2) All funds and/or investments then on hand in the "University of
North Carolina Dormitory Repair and Replacement Reserve
Account of I960" provided for by Section 503 and maintained
under Section 504 of the Resolution under which the "University
of North Carolina Dormitory Revenue Bonds of I960. Series
A, B, and C", dated November 1, I960, being refunded hereby,
were issued.
Thereafter, the Borrower further covenants and agrees that, on or before
the close of such fiscal year beginning with the fiscal year immediately
following the fiscal year in which the Debt Service Reserve Requirements
for the "Dormitory System Bond and Interest Sinking Fund Account of 1963",
as prescribed by the provisions of Special Condition (e) above have first
been met, and after making the semi-annual deposits into said Sinking Fund
Account thereafter prescribed by said Special Condition (e), that it will
deposit to the credit of the "Dormitory System Repair and Replacement
Reserve Account of 1963" the sum of $52, 000 to be secured from the