69

63

It is furthe provided that, notwithstanding the provisions of any of the
foregoing paragraphs (1) through (5) of this Condition, the Borrower may
discontinue the operation of Fourth Dormitory, or may sell or dispose of
said Dormitory, if and whenever the Borrower shall determine that no net
income can thereafter be reasonably anticipated therefrom. The proceeds
of such sale shall be deposited into the "Housing System of 1964 Sinking
Fund Account" established under the provisions of Special Condition (e)
above.

(m) The Borrower covenants and agrees that it shall not permit any free use
of the facilities and services of the Housing System to be established
in accordance with the provisions of Special Condition (b) above, by itself,
its administrative and faculty personnel, its students, or by others.

(n) At or prior to the advance of any loan funds hereunder or the public sale
of its "North Carolina State of the University of North Carolina at
Raleigh Housing System Revenue Bonds of 1964, Series A, B, C, and E"
in the aggregate principal amount of $7,005,000 dated September 1, 1964,
and in the manner provided for by Special Condition (a) above (whichever
may first occur), the Borrower shall exchange its "North Carolina State
of the University of North Carolina at Raleigh Housing System Revenue
Bonds of 1964, Series D" dated September 1, 1964, totaling $613,000
in principal amount and scheduled to mature from September 1, 1965
to September 1, 1981, in the same annual amounts of principal as the
next mentioned Bonds for all of the then outstanding "North Carolina
State College of Agriculture and Engineering of the University of North
Carolina Dormitory Revenue Bonds - Series 1961" dated September 1,
1961, not held by the Government.

(o) The attached Terms and Conditions (CFA-520, 4/63) constituting a part
of the subject Loan Agreement are amended, modified, revised as follows:

(1) Section 5, Title Evidence is revised to read:

"The Borrower shall furnish the Government satisfactory evidence of
its ownership of all the Housing System facilities and the sites thereof.

(2) Section 11, Prerequisites to Loan Disbursements - Sub-section (c)
is revised to read:

"Prior to disbursing any portion of the loan proceeds, the Borrower
shall present satisfactory evidence to the Government that it is
able to provide the Project site and the sites of the other facilities
of the Housing System to be established pursuant to the Loan
Agreement free from all encumbrances."

(3) Section 12, Construction Account - The last paragraph is revised
to read:

"Any moneys remaining in the Construction Account on Project
CH-NC-99 (D) after all of the costs of the Project have been paid
shall be used to the extent possible for the redemption of the
'North Carolina State of the University of North Carolina at
Raleigh Housing System Revenue Bonds of 1964, Series F, ' and any
residue shall be deposited in the "Housing System of 1964 Bond
and Interest Sinking Fund," provided for in the Loan Agreement."

(4) Section 33, Sub-section (a) Fire and Extended Coverage

The third paragraph is deleted and the following inserted in lieu
thereof: "In the event of any damage to or destruction of any said
building or buildings, the Borrower shall promptly arrange for the
application of the insurance proceeds for the repair and reconstruction
of the damaged or destroyed portion thereof, wherever the loss of
revenues from such damaged or destroyed building would reduce the
revenues and income pledged as security for the Bonds below one
and thirty-five hundredths (1.35) times the average annual
requirements for principal of and interest on all bonds then
outstanding and payable from the net revenues of the Housing
System and any other revenues pledged as security.