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(b) The Borrower covenants and agrees, as soon as the provisions of Special
Condition (a) above pertaining to the "North Carolina State of the
University of North Carolina at Raleigh Housing System Revenue Bonds
of 1964, Series A, B, C, and E" have been complied with, to establish
a "North Carolina State of the University of North Carolina at Raleigh
Housing System" (hereinafter sometimes referred to as the "Housing
System") to consist of:

(1) The existing dormitory for men known as Bragaw Dormitory constructed
under Project NC-31-CH-7(D) and financed from the proceeds of the
"North Carolina State College of Agriculture and Engineering of
the University of North Carolina Dormitory Revenue Bonds - Series
1956," dated November 1, 1956, herein refunded.

(2) The existing apartments for married students known as McKimmon
Village constructed under Project NC-31-CH-22(D) and financed
from the proceeds of the "North Carolina State College Student
Apartments Revenue Bonds," dated September 1, 1958, herein refunded.

(3) The existing twelve small dormitories for student living groups
constructed under Project NC-CH-37 (D) and financed from the proceeds
of the "North Carolina State College Student Housing Revenue Bonds,
Series 1961," dated February 1, 1961, herein refunded.

(4) The existing dormitory for men constructed under Project NC-CH-38 (D)
and financed from the proceeds of the "North Carolina State College
of Agriculture and Engineering of the University of North Carolina,
Dormitory Revenue Bonds - Series 1961," dated September 1, 1961.
herein refunded.

(5) The heretofore constructed dormitories known as Alexander, Bagwell,
Bectan, Berry, Fourth, Gold, Owen, Stadium, Syme, Tucker,
Turlington, Watauga, and Welch Dormitories.

(6) The dormitory for men to be constructed under Project CH-NC-99 (D).

(7) Any other housing facilities, together with the necessary appurtenant
facilities, that may be voluntarily added to the Housing System at
future dates as additional security for the then outstanding Bonds
and/or for the issuance of additional parity bonds for the purpose
of financing, entirely or in part, the cost of such additional
facilities under the provisions of Special Condition (1) and
Special Condition (j) hereof.

(c) The Borrower covenants and agrees, as soon as the provisions of Special
Condition (a) above pertaining to the "Housing System Revenue Bonds,
Series A, B, C, and E" have been complied with and as soon as the
Housing System has been established in accordance with Special Condition
(b) above, to establish a "North Carolina State of the University of
North Carolina at Raleigh Housing System Revenue Bonds of 1965 Revenue
Fund Account" (herein sometimes referred to as the "Housing System of
1964 Revenue Fund Account") into which shall be deposited:

(1) All unexpended or unencumbered funds and/or investments then on
deposit, or on hand to be deposited, in the "State College Student
Apartments Revenue Bonds, Series 1958, Revenue Fund" provided for
by Section 503 of the Resolution under which the "North Carolina
State College Student Apartments Revenue Bonds, Series 1958,"
dated September 1, 1958, being refunded hereby, were issued.

(2) All unexpended or unencumbered funds and/or investments then on
deposit, or on hand to be deposited, in the "North Carolina State
College Student Housing Revenue Fund Account of 1961" provided
for by Section 503 of the Resolution under which the "North
Carolina State College Student Housing Revenue Bonds, Series
1961," dated February 1, 1961, being refunded hereby, were
issued.