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Bond Insurance [To be pro~ ided] The Mortgage Concurrently with the execution and delivery of the Certificates, the County is obligated to execute and deliver to the Trustee a mortgage dated as of December 1, 1998 from the County, as mortgagor, to the Trustee, as mortgagee, pursuant to which the County mortgages its 68.71 % undivided interest in tne Site to the Trustee as security for the payment of the Financing Payments (the "Site Mortgage"). The Site Mortgage does not create any lien on the District's 31.29% undivided interest in the Site. As a consequence, any foreclosure on the Site Mortgage would require any purchaser at such foreclosure sale to accept purchasing an interest in the Site that would then be held by such purchaser as a tenant in common with the District, and would be dependent upon the District's cooperation with respect to any development or use of the Site. THIS MAY HAVE THE EFFECT OF MAKING SUCH A FORECLOSURE SALE IMPOSSIBLE DUE TO THE UIY~VILLINGNESS OF PROSPECTIVE BUYERS TO PURCHASE SUCH AN UNDIVIDED INTEREST IN THE SITE, OR BY SIGNIFICANTLY REDUCING THE VALUE THE TRUSTEE MAY BE ABLE TO REALIZE FROM A FORECLOSURE ON THE SITE MORTGAGE. At such time as the County's condominium interests in the Project come into legal existence by virtue of the filing of the Condominium Declaration with respect to the Project: (1) the County is obligated to execute and deliver to the Trustee the Condominium Mortgage, which Condominium Mortgage is required to be promptly recorded by the Trustee in the real estate records for Marion County, Oregon; and (2) the Trustee is required to execute and deliver to the County a release and discharge of the Site Mortgage. T'he term "Condominium Mortgage" is defined in the Agreement as the Mortgage to be executed and delivered by the County, as mortgagor, to the Trustee, as mortgagee, in accordance with the Agreement, pursuant to which the County mortgages its condominium interests in the Project to the Trustee as security for the payment of the Financing Payments. Upon the execution and delivery of the Condominium Mortgage as described above, the Certificates will no longer be secured by a mortgage lien on the ~ County's undivided interest in the Site. The Condominium Mortgage will not create any lien against the Site, nor will it create any lien against any portion of the Project not included within the County's condominium units in the Project. The lien of the Condominium Mortgage will attach only to the County's condominium units in the Project and rights appurtenant thereto. As used herein, the term "Mortgage" means: (1) until the Condominium Mortgage is executed and delivered by the County to the Trustee pursuant to the Agreement, the Site Mortgage; and (2) from and after the execution and delivery by the County to the Trustee of the Condominium Mortgage pursuant to the Agreement, the Condominium Mortgage. Under the Agreement and subject to the terms and conditions set forth therein, the Trustee will be entitled to foreclosure upon the lien of the Mortgage upon the occurrence of an Event of Default (as defined in the Agreement) or a Nonappropriation Event (as defined below under the caption "THE 1998 CERTIFICATES- Remedies Upon County's Failure To Appropriate"). The Mortgage will be granted by the County pursuant to the authority conferred by ORS 271.390. As applied to the Agreement, that statute provides that: (1) the Site Mortgage and the Condominium Mortgage may only be foreclosed by means of a legal proceeding brought by the Trustee in the Circuit Courts for Mazion County, Oregon, and the property interests subject to the liens of such mortgages may only be sold upon order of the court; and (2) the proceeds realized from any such foreclosure sale shall be applied, first, to the payment of the costs of the foreclosure, second, to the unpaid Financing Payments owing under the Agreement, and third, the balance, if any, to the County. THERE CAN BE NO ASSURANCE THAT, FOLLOWING THE OCCURRENCE OF AN EVENT OF DEFAULT OR A NONAPPROPRIATION EVENT, THE TRUSTEE WILL BE ABLE TO FORECLOSE ON THE LIEN OF THE MORTGAGE AND ~ SELL THE PROPERTY SUBJECT TO SUCH LIEN AT A PRICE SUFFICIENT TO PAY ALL COSTS OF FORECLOSURE AND ALL AMOUNTS OWING TO THE OWNERS OF THE OUTSTANDING CERTIFICATES.