University of Virginia Library

APPROVAL OF BOND ISSUANCE

The following resolution was adopted:

WHEREAS, pursuant to Chapter 3.2, Title 23 of the Code of Virginia of 1950, as amended (the "Act"), the General Assembly of Virginia has authorized the Virginia College Building Authority (the "Authority") to develop a pooled bond program (the "Program") to purchase bonds and other debt instruments issued by public institutions of higher education in the Commonwealth of Virginia (the "Institutions") to finance or refinance the construction of projects of capital improvement specifically included in a bill passed by a majority of those elected to each house of the General Assembly of Virginia (the "Projects"); and

WHEREAS, the Authority intends to issue from time to time under the Program its Educational Facilities Revenue Bonds (Public Higher Education Financing Program) (the "Bonds") to finance the purchase of bonds and other debt instruments issued by the Institutions to finance or refinance the Projects, all in the furtherance of the purposes of the Act and the Program; and

WHEREAS, the Board of Visitors of The Rector and Visitors of the University of Virginia (the "Board") may from time to time wish to finance or refinance Projects of The Rector and Visitors of the University of Virginia (the "Institution") through the Program; and

WHEREAS, if the Institution wishes to finance or refinance a Project through the Program, it will be necessary for the Institution to enter into a Loan Agreement (a "Loan Agreement") between the Authority and the Institution and to evidence the loan to be made by the Authority to the Institution pursuant to the Loan Agreement

by issuing the Institution's promissory note (the "Note") pursuant to Section 23-19 of the Code of Virginia of 1950, as amended. Pursuant to the Loan Agreement, the Authority will agree to issue its Bonds and to use certain proceeds of the Bonds to purchase the Note issued by the Institution and the Institution will agree to use the proceeds received from the Authority to finance or refinance the construction of the Project and to make payments under the Loan Agreement and the Note in sums sufficient to pay, together with certain administrative and arbitrage rebate payments, the principal of, premium, if any, and interest due on that portion of the Bonds issued to purchase the Note; and

WHEREAS, the Institution now proposes to sell to the Authority its Note (the "2000A Note") to be issued under a Loan Agreement (the "2000A Loan Agreement") to finance or refinance all or a portion of the costs of the Darden School Expansion project, the National Radio Astronomy Observatory Addition project and the Student Center for the University of Virginia's College at Wise project (together, the "2000A Project"); and

WHEREAS, there has been made available to the Board in the office of the Institution's Executive Vice President and Chief Operating Officer the proposed forms of the 2000A Note and the 2000A Loan Agreement; and

WHEREAS, it is the desire of the Board to authorize the execution and delivery of the 2000A Loan Agreement and the execution and issuance of the 2000A Note to authorize officers of the Institution to execute, deliver and issue in the name of and on behalf of the Institution, the 2000A Loan Agreement, the 2000A Note and any and all documents necessary to effectuate the financing or refinancing of all or a portion of the costs of the 2000A Project through the Program with the Authority and to facilitate the purchase of the 2000A Note by the Authority; and

WHEREAS, it is the desire of the Board to approve the further participation by the Institution in the Program and to authorize the execution, delivery and issuance of such other Loan Agreements and Notes on terms and conditions substantially similar to the 2000A Loan Agreement and 2000A

Note and to similarly authorize certain officers of the Institution to execute, deliver and issue in the name of and on behalf of the Institution, all Loan Agreements, all Notes and any and all future documents necessary to effectuate the Program with the Authority and to facilitate the purchase of the Notes by the Authority.

RESOLVED:

Section 1. The Board authorizes hereby the participation of the Institution in the Program and the execution of the loan agreements and other documents, including any note, as may be authorized by its authorized officers.

Section 2. The President of the Institution and the Executive Vice President and Chief Operating Officer of the Institution (the "Authorized Officers"), or either of them, are each hereby delegated and invested with full power and authority to execute, deliver and issue, on behalf of the Board, (a) the 2000A Loan Agreement with such changes, insertions or omissions as may be approved by the Authorized Officers, whose approval shall be evidenced conclusively by the execution and delivery of the 2000A Loan Agreement, (b) the 2000A Note with such changes, insertions or omissions as may be approved by any Authorized Officer, whose approval shall be evidenced conclusively by the execution and issuance of the 2000A Note, and (c) any and all other documents, instruments or certificates as may be deemed necessary to consummate the financing or refinancing of all or a portion of the costs of the 2000A Project through the Program, the construction of the 2000A Project and the Institution's participation in the Program, and to further carry out the purposes and intent of this Resolution. The Authorized Officers are directed to take such steps and deliver such certificates prior to the delivery of the 2000A Note as may be required under existing obligations of the Institution.

Section 3. The Authorized Officers, or either of them, are each hereby delegated and invested with full power and authority to execute and deliver, on behalf of the Board, (a) such future Loan Agreements in substantially

the form of the 2000A Loan Agreement with such changes, insertions or omissions as may be approved by any Authorized Officer, whose approval shall be evidenced exclusively by the execution and delivery of the future Loan Agreement, (b) such future Notes in substantially the form of the 2000A Note with such changes, insertions or omissions as may be approved by the Authorized Officers, whose approval shall be evidenced exclusively by the execution and delivery of the future Note, and (c) any and all other documents, instruments or certificates as may be deemed necessary in the future to consummate the Program, the construction of the Projects and the Institution's participation in the Program, and to further carry out the purposes and intent of this Resolution in the future, it being the intent of the Board that no further action on behalf of the Board shall be necessary to empower the Authorized Officers, or either of them, to execute, deliver and issue such future Loan Agreements, future Notes and other documents as may be deemed necessary in order for the Institution to participate in the Program in the future.

Section 4. The authorizations given above as to the execution, delivery and issuance of the 2000A Loan Agreement and the 2000A Note are subject to the following parameters: (a) that the principal amount to be paid under the 2000A Note shall not be greater than the aggregate amount authorized for the components of the 2000A Project by the General Assembly of Virginia, including any adjustments required or permitted by law, (b) that the interest rate payable under the 2000A Note shall not exceed a "true" or "Canadian" interest cost more than fifty basis points higher than the interest rate for "AA" rated securities with comparable maturities, as reported by Delphis-Hanover, or another comparable service or index on the date that the interest rates on the 2000A Note are determined, taking into account original issue discount or premium, if any, (c) that the weighted average maturity of the principal payments due under the 2000A Note shall not be in excess of twenty (20) years, (d) that the last principal payment date under the 2000A Note with respect to each of the components of the 2000A Project shall not extend beyond the period of the reasonably expected economic life of each such component of the 2000A Project, (e) that the financing of the 2000A Project and the terms

and provisions of the 2000A Loan Agreement and the 2000A Note will comply with the Alternative Construction and Financing Guidelines issued by the Commonwealth's Secretary of Finance, and (f) that the actual interest rates, maturities, and date of the 2000A Note shall be approved by an Authorized Officer, which approval will be evidenced by the execution of the 2000A Note.

Section 5. The authorizations given above as to the execution, delivery and issuance of any future Loan Agreements and future Notes are subject to the following parameters: (a) that the principal amount to be paid under such Notes shall not be greater than the amount authorized for the Projects by the General Assembly of Virginia, including any adjustments required or permitted by law, (b) that the interest rate payable under such Notes shall not exceed a "true" or "Canadian" interest cost more than fifty basis points higher than the interest rate for "AA" rated securities with comparable maturities, as reported by Delphis-Hanover, or another comparable service or index on the dates that the interest rates on such Notes are determined, taking into account original issue discount or premium, if any, (c) that the weighted average maturity of the principal payments due under such Notes shall not be in excess of twenty (20) years, (d) that the last principal payment date under such Notes with respect to each of the components of the Projects shall not extend beyond the period of the reasonably expected economic life of each such component of the Projects being financed, and (e) that the financing of the Projects and the terms and provisions of such Loan Agreements and Notes will comply with the Alternative Construction and Financing Guidelines issued by the Commonwealth's Secretary of Finance.

Section 6. The Board acknowledges, on behalf of the Institution, that if the Institution fails to make any payments of debt service due under any Loan Agreement or Note, including the 2000A Loan Agreement and the 2000A Note, the Program authorizes the State Comptroller to charge against the appropriations available to the Institution all future payments of debt service on that Loan Agreement and Note when due and payable and to make

such payments to the Authority or its designee, so as to ensure that no future default will occur on such Loan Agreement or Note.

Section 7. The Board agrees that if the Authority determines that the Institution is an "obligated person" with respect to which a disclosure obligation arises under Rule 15c2-12 of the Securities and Exchange Commission with respect to any issue of Bonds, the Institution will enter into a continuing disclosure undertaking in form and substance satisfactory to the Authority and the Institution and will comply with the provisions and disclosure obligations contained therein.

Section 8. This resolution shall take effect immediately upon its adoption.