University of Virginia Library

SECTION 604. Application of Money in Redemption Account.

(a) Prior to and on the Fixed Rate Date, money held for the credit of the Redemption Account shall be transferred to the Paying Agent one Business Day prior to the date of redemption and shall be applied by the Paying Agent on the date of redemption to reimburse the Bank for drawings made under the Letter of Credit or any Substitute Credit Facility or Alternate Credit Facility to pay the redemption price of Bonds to be optionally redeemed. Within one (1) hour after the Paying Agent has received the money drawn on the Credit Facility to pay principal of all Bonds (other than Bank Bonds) being redeemed and has received the amounts specified in the preceding sentence, the Paying Agent shall notify the Bank that a payment of principal on redemption is to be made and that the Bank shall be reimbursed.

• (b) After the Fixed Rate Date money held for the credit of the Redemption Account shall be applied to the purchase or redemption of Bonds, as follows:
• (i) Subject to the provisions of subparagraph (iii) of this Section, the State Treasurer shall endeavor to purchase

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  and cancel Bonds or portions thereof, whether or not such Bonds or portions thereof shall then be subject to redemption, at the most advantageous price obtainable with reasonable diligence, such price not to exceed the redemption price that would be payable on the next redemption date to the Holder of such Bonds under the provisions of Article V hereof if such Bonds or portions thereof should be called for redemption on such date from the money in the Redemption Account. The State Treasurer shall pay the interest accrued on such Bonds or portions thereof to the date of settlement therefor from the Interest Account and the purchase price from the Redemption Account.
• (ii) Subject to the provisions of subparagraph (iii) of this Section, the State Treasurer shall call for redemption on each Interest Payment Date such amount of Bonds or portions thereof as, with the redemption premium, if any, will exhaust the money then held for the credit of the Redemption Account as nearly as may be practicable; provided, however, that not less than Fifty Thousand Dollars ($50,000) principal amount of Bonds shall be called for redemption at any one time. Such redemption shall be made pursuant to the provisions of Article V hereof. Not later than 10:00 A.M. on the redemption date the State Treasurer shall withdraw from the Interest Account and from the Redemption 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; and
• (iii) Money in the Redemption Account shall be applied by the State Treasurer to the purchase or the redemption of Bonds then Outstanding in accordance with the latest Officer's Certificate filed by the University with the State Treasurer designating the Bonds to be purchased or redeemed. In the event no such Officer's Certificate is filed, the State Treasurer shall apply such money to the purchase or redemption of such Bonds as he shall determine.

Upon the retirement of any Bonds by purchase or redemption pursuant to the provisions of this Section, the State Treasurer shall file with the University and the Paying Agent 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.