University of Virginia Library

SECTION 602. Application of Money in Sinking Fund Account.

(a) Prior to and on the Fixed Rate Date, the money held for the credit of the Sinking Fund Account shall be applied as set forth in Section 209 hereof.

• (b) After the Fixed Rate Date money held for the credit of the Sinking Fund Account shall be applied to the retirement of Bonds, including Bank Bonds, then outstanding as follows:
• (i) If directed to do so by the University, the State Treasurer shall endeavor to purchase and cancel Bonds or portions thereof then subject to redemption by operation of the Sinking Fund Account at the most advantageous price obtainable with reasonable diligence, such price not to exceed the redemption price provided in Section 501(d) hereof which would be payable on the next December 1 to the Holders of such Bonds under the provisions of Article V hereof if such Bonds or portions thereof were to be called for redemption on such date, plus accrued interest to the date of purchase. The State Treasurer shall pay the interest accrued

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  on such Bonds or portions thereof to the date of settlement therefor from the Interest Account and the purchase price from the Sinking Fund Account, but no such purchase shall be made by the State Treasurer from money in the Sinking Fund Account within the period of forty-five (45) days immediately preceding the next December 1 on which such Bonds are subject to redemption. The aggregate purchase prices of such Bonds so purchased shall not exceed the amount deposited in the Sinking Fund Account on account of the Sinking Fund Requirement for such Bonds; provided, however, that if in any year the amount held for the credit of the Sinking Fund Account plus the principal amount of all Bonds purchased during such year pursuant to the provisions of this subparagraph (i) exceeds the aggregate Sinking Fund Requirements for all Bonds then Outstanding for such year, the State Treasurer shall endeavor to purchase any Bonds then Outstanding with such excess money;
• (ii) The State Treasurer shall call for redemption on each December 1, as provided in Section 501(d) hereof, Bonds or portions thereof then subject to redemption in a principal amount equal to the aggregate Sinking Fund Requirement for the Bonds for such December 1, less the principal amount of any such Bonds retired by purchase pursuant to subparagraph (i) of this Section. Such redemption shall be made pursuant to the provisions of Article III of the Resolution. If such December 1 or semiannual payment date for Bank Bonds is the stated maturity date of any such Bonds, the State Treasurer shall not call such Bonds for redemption but, not later than 10:00 A.M. on such maturity date, shall withdraw from the Sinking Fund Account and remit to the Paying Agent, in Federal Reserve or other immediately available funds, the amount required for paying the principal of such Bonds when due and payable. Not later than 10:00 A.M. on each such redemption date, the State Treasurer shall withdraw from the Interest Account and the Sinking Fund Account and wire transfer to the Paying Agent, in Federal Reserve or other immediately available funds the respective amounts required for paying the interest on and the redemption price of the Bonds or portions thereof so called for redemption.

In the event the balance in the Sinking Fund Account is insufficient for the payment of the redemption price on the Bonds on the next ensuing payment date, the State Treasurer shall transfer to such account such amounts as may be necessary to remedy the deficiency therein from the Reserve Account; provided, however, that amounts on deposit to the Proceeds Subaccount shall be exhausted prior to the transfer of any amount on deposit to the credit of the Equity Subaccount.

If, prior to any December 1, by the application of money in the Sinking Fund Account the State Treasurer should purchase and deliver to the Paying Agent for cancellation Bonds in excess of the aggregate Sinking Fund Requirement for such December 1, the tate Treasurer shall file with the University and the Paying Agent not later than the 20th day prior to the next December 1 on which Bonds are to be redeemed a statement identifying the Bonds purchased or delivered and the amount of such excess. The University shall thereafter cause an Officer's Certificate to be filed with the Paying Agent not later than the 10th day prior to such December 1, setting forth with respect to the amount of such excess the years in which the Sinking Fund Requirements with respect to Bonds are to be reduced and the amount by which the Sinking Fund Requirements so determined are to be reduced.

Upon the retirement of any Bonds by purchase or redemption pursuant to the provisions of this Section, the Paying Agent shall file with the State Treasurer and the University a statement identifying such Bonds and setting forth the date of purchase or redemption, the amount of the purchase price or the redemption price of such Bonds and the amount paid as interest thereon.