University of Virginia Library

APPROVAL OF RESOLUTION FOR AUTHORIZATION TO PARTICIPATE IN
COMMONWEALTH OF VIRGINIA 9-C BOND ISSUE

• The following resolution was adopted:
• WHEREAS, there has been enacted by the General Assembly of Virginia an act entitled "Commonwealth of Virginia Higher Educational Institutions Bond Act of 1990" (the "Act");
• WHEREAS, pursuant to the Act, the Treasury Board of the Commonwealth of Virginia is authorized, subject to the approval of the Governor, to sell and issue bonds of the Commonwealth of Virginia in an aggregate principal amount not exceeding $161,378,700 plus financing expenses for the purpose of providing funds, together with other available funds, for paying the cost of acquiring, constructing and equipping certain revenue-producing capital projects, including the enlarging and improving thereof, at certain institutions of higher learning in the Commonwealth, all in accordance with the provisions of Section 9(c) of Article X of the Constitution of Virginia;
• WHEREAS, such revenue-producing capital projects under the Act include the replacement of the heater/chiller plant boiler (13747) (the "Project") for the University of Virginia (the "University"); and

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• WHEREAS, the cost of the Project is now estimated to equal or exceed $5,450,000, and the Treasury Board of the Commonwealth of Virginia is expected to agree to sell a portion of the above bonds tentatively to be designated "Higher Educational Institutions Bonds, Series 1990A" (the "Bonds") in the aggregate principal amount now estimated at $1,220,000 for the purpose of financing a portion of the cost of the Project plus financing expenses.

NOW, THEREFORE, BE IT RESOLVED BY THE RECTOR AND VISITORS OF THE UNIVERSITY OF VIRGINIA:

Section 1. The Rector and Visitors of the University of Virginia (the "Board") (a) covenants to fix, revise, charge and collect charges and surcharges from the University's auxiliary enterprises in connection with the provision of heat and air conditioning by the Project to such auxiliary enterprises so that the revenues therefrom will at all times be sufficient to pay the principal of, premium, if any, and interest on the Bonds issued to finance a portion of the Project as and when the same become due, and to pay a portion of the current expenses of operating the Project (the "Current Expenses") which portion of such Current Expenses shall be a first charge on such charges and surcharges and which portion of such Current Expenses shall be at least equal to a

percentage of such Current Expenses determined by dividing the total annual steam usage of the auxiliary enterprises utilizing the Project by the total annual steam usage attributable to the Project (the "Allocated Current Expenses"); and (b) pledges such charges and surcharges to the payment of the principal of, premium, if any, and interest on the Bonds issued to finance a portion of the Project. The Board further covenants that such charges and surcharges will be fixed, revised, charged and collected so that the revenues therefrom, after payment of Allocated Current Expenses, will at all times be sufficient to pay the principal of, premium, if any, and interest on the Bonds issued to finance a portion of the Project as and when the same become due, and to pay debt service on any outstanding obligations that have been previously issued which are secured by the charges and surcharges pledged herein, that portion of the Bonds issued to finance a portion of the Project to be secured on a parity with such obligations (other than any obligations secured by a prior right in the rentals, fees and charges pledged herein.) Any charges and surcharges pledged herein in excess of the amounts required for the payment of Allocated Current Expenses, the payment of the principal of, premium, if any, and interest on the Bonds issued to finance a portion of the Project when due, and debt service on any outstanding obligations which are secured by such charges and surcharges may be used by the University for any other proper purpose.

Section 2. It is hereby found, determined, and declared that, based upon responsible engineering and economic estimates and advice of appropriate officials of the University, as shown on the Financial Feasibility Study attached hereto as Exhibit A, the anticipated revenues received from the charges and surcharges pledged herein will be sufficient to pay Allocated Current Expenses, the principal of, premium, if any, and interest on the Bonds issued to finance a portion of the Project as the same become due, and debt service on any outstanding obligations which are secured by the charges and surcharges pledged herein so long as the aggregate amount of debt service actually payable in any bond year on the Bonds issued to finance a portion of the Project does not exceed the amounts assumed in the Feasibility Study, unless the University provides the Governor and the Treasury Board of the Commonwealth of Virginia with satisfactory evidence that the charges and surcharges pledged herein will also be sufficient to pay the additional amount of actual debt service which for any bond year exceeds the amount stated above.

Section 3. The Board covenants that so long as the bonds are outstanding, the University will provide to the Treasurer of Virginia on or before each November 1, a written report illustrating the calculation of Allocated Current

Expenses for the year ending on the preceding June 30 and illustrating the calculation of estimated Allocated Current Expenses for the University's current fiscal year. Such report shall be in such form and contain such detail as to demonstrate annual compliance with the covenants contained in this resolution.

Section 4. The Board covenants that so long as the bonds are outstanding, the University will pay to the Treasurer of Virginia, not less than 30 days before each interest or principal and interest payment date, the amount certified by the Treasurer of Virginia to be due and payable on such date as principal of, premium, if any, and interest on the Bonds issued on behalf of the University to finance a portion of the Project.

Section 5. The Board covenants that the University will pay from time to time its proportionate share of all expenses incurred in connection with the sale and issuance of the Bonds and all expenses thereafter incurred in connection with the payment of the principal of, premium, if any, and interest on the Bonds, all as certified by the Treasurer of Virginia to the University.

Section 6. The Board covenants to proceed with the construction of the Project with due diligence and that the University will spend all of the proceeds derived from the sale of the Bonds issued to finance a portion of the Project for costs associated with the Project. The Board further covenants that the University, either alone or in conjunction with the Treasurer of Virginia, will, to the extent permitted by Virginia law, take all other actions necessary to maintain the exemption of interest on the Bonds from gross income under Federal and Virginia law and, unless advised in writing by a firm of attorneys nationally recognized in the subject of tax-exempt obligations that such compliance is not necessary in order to maintain such exemption, to comply with the provisions contained in the Internal Revenue Code of 1986, as amended (the "Code"), relating to tax-exempt obligations, including without limitation (a) refunding any obligations previously issued to finance the Project within 30 days of the issuance of the Bonds, (b) restricting the yield on the investment of the proceeds of the Bonds, including amounts treated as proceeds by the Department of the Treasury regulations promulgated pursuant to the Code, and (c) paying any required rebate to the United States.

Section 7. The Board covenants that for so long as the Bonds are outstanding the University will not enter into any operating lease, management contract or similar agreement with any person or entity, other than a state or local governmental unit, for all or any portion of the Project without first obtaining the written approval of the Treasurer of Virginia and a firm of attorneys nationally recognized in the subject of tax-exempt obligations.

Section 8. This resolution shall take effect immediately.

The undersigned Secretary to the Board of Visitors of the University of Virginia does hereby certify that the foregoing is a true and correct copy of a resolution adopted at a meeting of the Board of Visitors of the University of Virginia duly convened and held on May 25, 1990, at which a quorum was present and voting, and that such resolution is now in full force and effect.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the University of Virginia this ____ day of May, 1990.