University of Virginia Library

ARTICLE IV EXPIRATION OF CREDIT FACILITY;
SUBSTITUTE CREDIT FACILITY;
MANDATORY TENDER PROVISIONS

SECTION 401. Expiration of Credit Facility; Substitute Credit Facility; Alternate Credit Facility.

The Credit Facility, as initially issued, will expire on December 14, 1991, unless it is extended in accordance with its terms. A Substitute Credit Facility may be substituted for the Credit Facility or any Substitute Credit Facility at any time if the University has first obtained an opinion of Bond Counsel to the effect that such substitution will not cause interest on the Bonds to become subject to federal income taxes; provided that prior to the effective date of the new Substitute Credit Facility the University delivers to the Paying Agent (i) the Substitute Credit Facility and (ii) a letter from Moody's stating that the rating assigned by Moody's to the Bonds will not be lowered because of the substitution of such Substitute Credit Facility. The Paying Agent shall notify the Holders of such substitution within five days after the effective date of such new Substitute Credit Facility. In no event shall the Credit Facility be terminated or released prior to the effective date of the Substitute Credit Facility.

SECTION 402. Alternate Credit Facility.

(a) Effective on any December 2, beginning December 2 in the Effective Year, an Alternate Credit Facility may be substituted for the Credit Facility or any Substitute Credit Facility or Alternate Credit Facility, if the University (i) delivers to the Paying Agent such Alternate Credit Facility at least sixty (60) days in advance of such December 2 and (ii) has obtained an opinion of Bond Counsel to the effect that the delivery of the Alternate Credit Facility will not cause interest on the Bonds to become subject to federal income taxes.

(b) Notice of the substitution of the Alternate Credit Facility will be mailed by first-class mail by the Paying Agent to each Holder at his address as shown on the registration books on or before the second Business Day following the Determination Date next preceding the Alternate Credit Date, concurrently with the notice required to be mailed by the Paying Agent to all holders pursuant to Section 203(b) hereof. Such notice shall state (i) that the existing Credit Facility, Substitute Credit Facility or Alternate Credit Facility is being replaced by a new Alternate Credit Facility, (ii) the principal terms of such new Alternate Credit Facility, (iii) the ratings that will be assigned to the

Bonds by Moody's as a result of the substitution of such new Alternate Credit Facility, (iv) that all Holders who wish to continue to own Bonds after the Alternate Credit Date must give notice to that effect to the Paying Agent no later than 4:00 P.M., New York time, on the November 15 prior to the Alternate Credit Date or be deemed to have tendered their Bonds for purchase and (v) that any Holders of Bonds that are deemed to have tendered their Bonds shall not be entitled to any payment (including any interest to accrue subsequently to the Alternate Credit Date) other than the purchase price for such Bonds which shall be equal to the unpaid principal amount of such Bonds, and such Bonds shall no longer be entitled to the benefits of the Resolution except for the purpose of payment of the purchase price therefor, which payment shall be made only upon the surrender of such Bonds at the principal corporate trust office of the Paying Agent.

(c) Any Holder desiring to retain such Bonds after the Alternate Credit Date must notify the Paying Agent in writing received not later than the November 15 prior to the Alternate Credit Date. Said notice shall state in substance:

• (1) The numbers and principal amounts of the Bonds which the Holder wishes to retain after the Alternate Credit Date;
• (2) A statement that the Holder wishes to continue to hold the Bonds specified in (1) above; and
• (3) The Holder is aware that the rating assigned to the Bonds by Moody's may be reduced or changed.

Any Holders not providing the Paying Agent with the notice described above shall be deemed to have tendered their Bonds to the Paying Agent effective as of the Alternate Credit Date and any such Holders shall have only those rights with respect to such Tendered Bonds as are set forth in Section 207 hereof.

(d) If the Bank shall have defaulted in its obligation to honor a Principal Drawing or a Tender Drawing (each as defined in the Reimbursement Agreement) under the Credit Facility or any Substitute Credit Facility or Alternate Credit Facility and a new Alternate Credit Facility is obtained pursuant to Section 211 hereof, it may become effective on any date without compliance with the procedures set forth in subsections (b) and (c) above, except that the Holders shall be notified by the Paying Agent that an Alternate Credit Facility has been obtained.

SECTION 403. Mandatory Tender Provisions.

If (i) the Bank gives notice to the Paying Agent requiring the Paying Agent to cause the mandatory tender for purchase of all Bonds on the Mandatory Tender Date as a result of an event of default under the

Reimbursement Agreement (or similar agreement with respect to a Substitute Credit Facility or Alternate Credit Facility), (ii) the State Treasurer gives notice to the Paying Agent that there are not sufficient Net Revenues made available by the University to make the deposit to the Reserve Account required by Section 605(d) hereof or (iii) an Act of Bankruptcy shall have occurred, the Holders of all Bonds (other than Bank Bonds) shall be deemed to have tendered their Bonds to the Paying Agent effective as of the Mandatory Tender Date and the Holders of such Tendered Bonds shall have only those rights with respect to such Tendered Bonds as are set forth in Section 207 hereof. Upon receipt of such notice from the Bank or the State Treasurer the Paying Agent shall give written notice to the Holders as soon as practicable thereafter, but in any event not later than twenty days prior to the Mandatory Tender Date, stating: (i) that all Bonds shall be deemed to have been tendered as of the Mandatory Tender Date, (ii) that the Holders of all such Bonds shall not be entitled to any payment (including any interest to accrue subsequently to the Mandatory Tender Date) other than the purchase price for such Bonds which shall be equal to the unpaid principal amount of such Bonds, and such Bonds shall no longer be entitled to the benefits of the Resolution except for the purpose of payment of the purchase price therefor, which payment shall be made only upon the surrender of such Bonds at the principal corporate trust office of the Paying Agent; and (iii) that the Holders will not have the right to elect to retain their Bonds.