University of Virginia Library

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

• The following resolution was adopted:

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• WHEREAS, there has been enacted by The House of Delegates and by The Senate of the General Assembly of Virginia an act entitled "Commonwealth of Virginia Higher Educational Institutions Bond Act of 1986" (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 $42,465,000 for the purpose of providing funds, with any other available funds, for paying the cost of acquiring, constructing and equipping 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, said revenue producing capital projects under the Act include Project Number 12599 of the University of Virginia (the "University") consisting of construction of the Student Health Facility (the "Project") at a cost of $3,620,000;
• WHEREAS, the Treasury Board proposes to sell a portion of the above bonds (the "Bonds") which will include an amount not to exceed $1,300,000 for the purpose of financing the cost of the Project;

NOW THEREFORE BE IT RESOLVED BY THE BOARD OF VISITORS OF THE UNIVERSITY OF VIRGINIA:

Section 1. The Board of Visitors of the University of Virginia (the "Board") (a) covenants to fix, revise, charge and collect a comprehensive student fee for full-time equivalent students and (b) pledges such fee to the payment of the principal of, premium, if any, and interest on that portion of the Bonds issued to finance the Project; provided that the current expenses of operating the Project (the "Current Expenses") shall be a first charge on such fee. The Board further covenants that such fee will be fixed, revised, charged and collected so that the net revenues therefrom, after payment of Current Expenses, will at all times be sufficient to pay the principal of, premium, if any, and interest on that portion of the Bonds issued to finance the Project as and when the same become due, and to pay debt service on any outstanding obligations, if any, that have been previously issued which are secured by the fee pledged herein, that portion of the Bonds issued to finance the Project to be secured on a parity with such obligations. Any such fees in excess of the amounts required for the payment of Current Expenses, the payment of the principal of, premium, if any, and interest on that portion of the Bonds issued to finance the Project when due, and debt service on any outstanding obligations which are secured by the fee pledged herein 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 Exhibit A hereto, the anticipated net revenues received from the fee pledged above will be sufficient to pay Current Expenses, the principal of, premium, if any, and interest on that portion of the Bonds issued to finance the Project as the same become due, and debt service on any outstanding obligations which are secured by the fee pledged herein, so long as (i) the effective true interest cost on the Bonds does not exceed 9.5% per annum, and (ii) the aggregate amount of debt service actually payable in any bond year and all bond years on that portion of the Bonds issued to finance the Project does not exceed the estimated aggregate amount of debt service for the corresponding year as shown on Exhibit A, unless the Vice President for Business and Finance provides the Governor and the Treasury Board of the Commonwealth of Virginia with satisfactory evidence that the fee pledged in Section 1 above will also be sufficient to pay the additional amount of actual debt service which for any bond year(s) exceeds the estimated amount shown on Exhibit A.

Section 3. 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 and interest on that portion of the Bonds issued on behalf of the University to finance the Project.

Section 4. 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 5. The Board covenants that the University within six months of the date of the issuance of the Bonds will spend all of the proceeds derived from the sale of that portion of the Bonds issued to finance 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 bond counsel for the issuance of the Bonds 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, 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 (unless the Treasurer of Virginia permits a longer period of time), and (b) paying any required rebate to the United States, all as may be directed by the Treasurer of Virginia.

Section 6. 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 governmental unit, for all or any portion of the Project, without first obtaining the written approval of the Treasurer of Virginia and bond counsel for the issuance of the Bonds.