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ARTICLE IV APPLICATION OF NOTE ACCOUNT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

ARTICLE IV
APPLICATION OF NOTE ACCOUNT

Section 401. Creation of Note Account. There is hereby created and established a special trust account to be deposited with and held by the Depository called the University of Virginia 1981 Bond Anticipation Note Account (the "Note Account"). The proceeds of the sale of the Notes shall be deposited in the Note Account and held therein with all investments thereof. Any payment (or transfer of funds) made by the University upon its special obligation promissory note dated November 5, 1981, shall be deemed received and shall be deposited in the Note Account.

Section 402. Application of Note Account. Any amount held in the Note Account shall be used, together with other available funds to pay the costs of issuance of the Notes, the costs of acquiring and installing a new telephone communication system for the University and the interest on and principal of the Notes.

Section 403. Pledge.

(A) As security for the payment of the Notes, the University hereby pledges (1) all moneys and investments in the Note Account, together with the


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earnings thereon, subject to the right of the University to withdraw money therefrom pursuant to this Note Resolution and (2) the University's Unrestricted Quasi-Endowment.

(B) The University shall not create or suffer to be created any pledge, lien or charge upon the Unrestricted Quasi-Endowment Funds, other than the pledge created by this Resolution and except for the pledge, lien or charge of other obligations or indebtedness of the University, including the University's Faculty Housing Revenue Bonds, Series of 1972 issued under an indenture between the University and Virginia National Bank, Trustee, dated as of February 1, 1972, the aggregate outstanding principal amount of which, when added to the principal amount of the Notes, does not exceed 75% of the amount of the Unrestricted Quasi-Endowment Funds. No such pledge, lien or charge other than that of the University's said Faculty Housing Revenue Bonds shall be superior to the pledge hereof.

(C) The University shall not impose any restrictions on any amounts held in its Endowment Funds, or the income therefrom, if by doing so it would reduce the market value of its Unrestricted Quasi-Endowment Funds to less than 133% of the outstanding principal amount of all obligations, including the Notes and the Faculty Housing Revenue Bonds referred to in Section 403(B), secured by or payable from such Unrestricted Quasi-Endowment Funds.

(D) Notwithstanding the provisions of Section 403(A), the University may from time to time withdraw from the Note Account such amounts as the University may have expended in issuing the Notes and in acquiring and installing a new telephone communications system for the University, provided that the aggregate amount which may be so withdrawn shall not exceed $7,500,000.

(E) Any moneys or investments remaining in the Note Account after payment in full of the principal of and interest on the Notes shall be used for any lawful purpose of the University, and may be withdrawn on instructions of an Authorized Officer confirmed in writing to the Depository.