Section 11. The Board covenants that the University (a)
within thirty days of the issuance of the Bonds, will spend at
least five percent of the net proceeds derived from the sale of
that portion of the Bonds issued to finance each Project for
costs associated with the construction of that Project, and (b)
within six months of the date of the issuance of the Bonds will
spend all of the proceeds derived from the sale of that portion
of the Bonds issued to finance the Projects for costs associated
with the Projects, unless the Treasurer of Virginia permits a
longer period of time (not to exceed three years) in which to
spend such proceeds. The Board further covenants that the
University, either alone or in conjunction with the Treasurer of
Virginia, will, to the extent permitted by Virginia law, take all
other actions necessary to maintain the tax-exempt status of
interest on the Bonds under Federal and Virginia law and, unless
advised in writing by bond counsel for the issuance of the Bonds
that such compliance is not necessary in order to maintain such
tax-exempt status, to comply with the provisions contained in the
Tax Reform Act of 1985 (H.R. 3838) (which Act has been adopted by
the House of Representatives, is being considered by the Senate
and contains an effective date of January 1, 1986) including (a)
limiting the investment of Bond proceeds in higher yielding
investments or nonpurpose obligations, (b) restricting the yield
on any investment property if the proceeds derived from the sale
of that portion of the Bonds issued to finance the acquisition of
property for the Projects is not spent within thirty days of the
issuance of the Bonds or all of the proceeds of the Bonds
allocable to the Projects are not spent within six months of the
issuance of the Bonds, or such longer period (not to exceed three
years) as may be permitted by the Treasurer of Virginia, (c)
refunding any obligations previously issued to finance the
Projects within 30 days of the issuance of the Bonds (unless the
Treasurer of Virginia permits a longer period of time), and (d)
paying any required rebate to the United States, all as may be
directed by the Treasurer of Virginia.
