federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Series 2018 Bonds or other funds of the University treated as proceeds of the Series 2018 Bonds that will cause interest on the Series 2018 Bonds to be included in gross income for federal income tax purposes. The University also covenants that it will, to the extent the arbitrage rebate requirements of Section 148 of the Code are applicable to the Series 2018 Bonds, take all actions necessary to comply (or to be treated as having complied) with those requirements in connection with the Series 2018 Bonds. Section 12. Refunding or Defeasance of the Series 2018 Bonds. The University may issue refunding bonds pursuant to State law or use money available from any other lawful source to carry out a refunding or defeasance plan, which may include (a) paying when due the principal of and interest on any or all of the Series 2018 Bonds (the “defeased Series 2018 Bonds”); (b) redeeming the defeased Series 2018 Bonds prior to their maturity; and (c) paying the costs of the refunding or defeasance. If the University sets aside in a special trust fund or escrow account irrevocably pledged to that redemption or defeasance (the “trust account”) money and/or Government Obligations maturing at a time or times and bearing interest in amounts sufficient to redeem, refund, or defease the defeased Series 2018 Bonds in accordance with their terms, then all right and interest of the Owners of the defeased Series 2018 Bonds in the covenants of this Series Resolution and the Master Resolution and in the funds and accounts obligated to the payment of the defeased Series 2018 Bonds shall cease and become void. Thereafter, the Registered Owners of defeased Series 2018 Bonds shall have the right to receive payment of the principal of and interest on the defeased Series 2018 Bonds solely from the trust account and the defeased Series 2018 Bonds shall be deemed no longer Outstanding. In that event, the University may apply money remaining in any fund or account (other than the trust account) established for
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