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 | Board of Visitors minutes October 7, 1988 |  |
RESOLUTION AUTHORIZING THE INCURRENCE OF A WORKING CAPITAL
LOAN IN THE AMOUNT OF $7,500,000 FROM THE UNIVERSITY OF VIRGINIA
HEALTH SERVICES FOUNDATION FOR THE BENEFIT OF UNIVERSITY OF VIRGINIA
HOSPITALS AND, IN EVIDENCE THEREOF, THE ISSUANCE OF A $7,500,000
PROMISSORY NOTE OF THE RECTOR AND VISITORS OF THE UNIVERSITY OF
VIRGINIA
- The following resolution was adopted:
RESOLVED by The Rector and Visitors of the University of Virginia that:
Section 1. The Board of Visitors of the University of Virginia has found and determined and does hereby declare that:
(a) By Article 2, Chapter 9, Title 23, Code of Virginia, 1950, as amended, there is created a corporation under the name and style of The Rector and Visitors of the University of Virginia (the "University") to be governed by a Board of Visitors (the "Board"), which is vested with the supervision, management and control of the University of Virginia at Charlottesville, Virginia.
(b) University of Virginia Hospitals ("Hospitals") is an operating division of the University, being a separate financial reporting entity, with management responsibility for the operation of the University's hospital facilities.
(c) Under the authority of Chapter 3, Title 23, Code of Virginia, 1950, as amended, and resolutions duly adopted by the Board and the Executive Committee of the Board, the University has heretofore issued, and there are currently outstanding, $95,386,796 Hospital Revenue Refunding Bonds (Series C) and $32,200,000 Variable Rate Demand Hospital Revenue Refunding Bonds (Series D) (collectively, the "Prior Bonds"), each of which series of Prior Bonds was issued to refund other series of hospital revenue bonds of the University issued previously to finance improvements and additions to the hospital and ancillary facilities operated by Hospitals.
(d) The University is authorized by Article 2, Chapter 9, Title 23, Code of Virginia, 1950, as amended, to borrow money to effectuate any of its corporate purposes.
(e) Management of Hospitals has requested the Board to authorize additional borrowing in order to provide additional working capital.
(f) The University of Virginia Health Services Foundation (the "Foundation") has offered to provide a loan to the University in the principal amount of $7,500,000 for the purpose hereinabove described and upon the terms and conditions hereinafter set forth.
(g) The incurrence of such loan and, in evidence thereof, the issuance of the promissory note of the University hereinafter described are in the best interests of the University and Hospitals.
Section 2. For the purpose of providing funds for the purpose set forth in paragraph (e) of Section 1 hereof, the University is hereby authorized to borrow the sum of $7,500,000 from the Foundation and, in evidence thereof, to issue its promissory note (the "Note") in the principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000). The principal of and the interest on the Note shall be payable solely from available funds of University of Virginia Hospitals, subject to the rights of the registered owners of the Prior Bonds and the rights of the holders of any additional Bonds issued pursuant to the Master Resolution adopted by the Executive Committee of the Board on November 30, 1984, as amended on May 30, 1985 (collectively, the "Master Resolution") and the holders of Parity Indebtedness (as defined in the Master Resolution) in and to the Net Revenues (as defined in the Master Resolution).
The Note shall be dated as of the date of issuance thereof and shall be stated to mature, subject to the right of prepayment hereinafter set forth, on the fifth anniversary of its date; provided, however, that the stated maturity of the Note may be extended, at the option of the Foundation, for an additional period of five years. The Foundation shall exercise such option be delivering to the Vice President for Business and Finance of the University, not later than 30 days prior to the original stated maturity of the Note, written notice of its election to so extend the maturity. In such event the University shall cause to be executed and delivered to the Foundation a new promissory note of the University, in substantially the form of the Note hereinafter set forth, reflecting such extended maturity date, and simultaneously therewith the Foundation shall deliver to the University, in exchange therefor, the Note. The Vice President for Business and Finance of the University shall promptly upon receipt of the original Note cause the same to be cancelled.
- The Note shall bear interest as follows:
- (a) With respect to any proceeds of the Note that have
not been expended by the University, the interest thereon
shall be equal to the investment income, including capital
gains, realized thereon, such amount to be paid to the Foundation by the University promptly upon receipt by the University. For purposes of this subparagraph, the purchase of an investment by the University shall not be deemed to constitute an expenditure of proceeds of the Note.3533
- (b) To the extent any proceeds of the Note have been expended by the University, the average outstanding balance for any calendar quarter shall bear interest, calculated on the basis of a year of 365/366 days and actual days elapsed, payable quarterly in arrears on each February 1, May 1, August 1 and November 1 at a rate per annum equal to the average rate earned on the Common Fund Short-Term Fund for the previous calendar quarter plus 1/2 of 1%. Such rate shall be recalculated quarterly.
The University covenants to maintain records and books of account in form sufficient to enable the calculations required by the preceding paragraph to be made in a timely manner, which records and books of account shall be available for inspection by the Foundation, acting through its officers, agents, employees and other authorized representatives, at reasonable times and upon reasonable notice. The University covenants that it will provide prompt written notice to the Foundation of any expenditure of the proceeds of the Note, determined as provided in Section 5 hereof, specifying the amount of such expenditure and the date on which it was made.
Both the principal of and the interest on the Note shall be payable in such lawful money of the United States of America as at the time of payment thereof is legal tender for the payment of public and private debts. The principal of the Note shall be payable, upon the presentation and surrender thereof, at the office of the Vice President for Business and Finance of the University, Madison Hall, University Avenue, Charlottesville, Virginia. Payment of interest on the Note shall be made on each interest payment date to the Foundation.
The Note may be prepaid, at the option of the University, at any time prior to the maturity thereof, either in whole or in part, from any moneys that may be made available for such purpose, at the principal amount of the Note to be prepaid, together with the interest accrued thereon to the date of prepayment, without penalty.
On the date of prepayment, moneys for such prepayment having been delivered to the Foundation, the University's obligation with respect to the Note or any part thereof so prepaid shall be discharged and any interest on the Note or any part thereof so prepaid shall cease to accrue.
The Note shall not be transferable by the Foundation without the prior written consent of the Vice President for Business and Finance of the University.
Section 3. The Note shall be signed by the Vice President for Business and Finance of the University, and the corporate seal of the University shall be impressed thereon. If the officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in office until such delivery.
- Section 4. The Note shall be in substantially the following
form:
3535No. R-1 $7,500,000
United States of America
Commonwealth of Virginia
THE RECTOR AND VISITORS OF THE UNIVERSITY OF VIRGINIA
Promissory Note
The Rector and Visitors of the University of Virginia (the
"University"), an educational institution and a public body and
governmental instrumentality of the Commonwealth of Virginia, for
value received, hereby promises to pay, solely from the sources
and in the manner hereinafter provided, to University of Virginia
Health Services Foundation (the "Foundation") or registered
assigns, on _________, 199_ (or earlier as hereinafter referred
to), upon the presentation and surrender hereof at the office of
the Vice President for Business and Finance of the University,
Madison Hall, University Avenue, Charlottesville, Virginia, the
principal sum of Seven Million Five Hundred Thousand Dollars
($7,500,000). The University also promises to pay, solely from
such sources, interest on the unpaid principal amount hereof, as
follows:
- (a) With respect to any proceeds of this Note that have not been expended by the University, the interest thereon shall be equal to the investment income, including capital gains, realized thereon, such amount to be paid to the Foundation by the University promptly upon receipt by the University.
- (b) With respect to any proceeds of this Note that have been expended by the University (determined as provided in the Note Resolution hereinafter mentioned), the average outstanding balance for any calendar quarter shall bear interest, calculated on the basis of a year of 365/366 days and actual days elapsed, payable quarterly in arrears on each February 1, May 1, August 1 and November 1 at a rate per annum equal to the average rate earned on the Common Fund Short-Term Fund for the previous calendar quarter plus 1/2 of 1%. Such rate shall be recalculated quarterly.
All such payments shall be made in such lawful money of the United States of America as at the time of payment is legal tender for payment of public and private debts.
This Note may be prepaid, at the option of the University, at any time prior to the maturity thereof, either in whole or in part, from any moneys that may be made available for such purpose, at the principal amount to be prepaid, together with the interest accrued thereon to the date of prepayment, without penalty.
On the date of prepayment, moneys for such prepayment having been delivered to the Foundation, the University's obligation with respect to this Note or any part thereof so prepaid shall be discharged and any interest on this Note or part thereof so prepaid shall cease to accrue.
This Note and the interest hereon are limited obligations of the University, and the University shall not be obligated to pay the principal of or the interest on this Note except from available funds of University of Virginia Hospitals, an operating division of the University, which is a separate financial reporting entity, subject to the rights of the registered owners of the University's $95,386,796 Hospital Revenue Refunding Bonds (Series C) and $32,200,000 Variable Rate Demand Hospital Revenue Refunding Bonds (Series D) and the rights of the holders of any additional Hospital Revenue Bonds issued pursuant to the Master Resolution adopted by the Executive Committee of the Board of Visitors of the University on November 30, 1984, as amended on May 30, 1985 (collectively, the "Master Resolution") and the holders of Parity Indebtedness (as defined in the Master Resolution) in and to the Net Revenues (as defined in the Master Resolution). This Note and the interest hereon shall not be deemed to constitute a debt or liability of the Commonwealth of Virginia, legal, moral or otherwise. Neither the Commonwealth of Virginia nor the University shall be obligated to pay the principal of or interest on this Note except from the sources noted above pledged or provided therefor, and neither the faith and credit nor the taxing power of the Commonwealth of Virginia nor any other revenues or funds of the University are pledged to the payment of the principal of or interest on this Note.
This Note is issued under and pursuant to the Constitution and laws of the Commonwealth of Virginia, including Article 2, Chapter 9, Title 23, Code of Virginia, 1950, as amended, and a resolution duly adopted by the Board of Visitors of the University on October 6, 1988 (the "Note Resolution"), to which Note Resolution reference is hereby made for the terms and conditions under which this Note is issued, and by the acceptance of this note the holder hereof assents to all the provisions of the Note Resolution.
This Note is issued with the intent that the laws of the Commonwealth of Virginia shall govern its construction.
All acts, conditions and things required by the Constitution and laws of the Commonwealth of Virginia and by the rules and regulations of the Board of Visitors of the University to happen, exist and be performed precedent to and in the issuance of this note have happened, exist and have been performed as so required.
IN WITNESS WHEREOF, The Rector and Visitors of the University of Virginia, pursuant to the Note Resolution, has caused this note to be executed by its Vice President for Business and Finance and the corporate seal of the University to be impressed hereon, all as of the ____ day of ___________, 1988.
THE RECTOR AND VISITORS OF
THE UNIVERSITY OF VIRGINIA
Section 5. Simultaneously with the delivery of the Note, the University shall deposit the proceeds of the Note and the proceeds of the $22,500,000 interfund loan (the "University Loan") being made by the University to University of Virginia Hospitals on the date of delivery of the Note to the credit of an account which shall be held separate and apart from all other funds and accounts of the University and University of Virginia Hospitals. Thereafter, any expenditures from said account shall be deemed to be 1/4 proceeds of the Note and 3/4 proceeds of the University Loan.
Section 6. In case the Note shall become mutilated or be destroyed or lost, the University shall cause to be executed a new Note of like date and tenor in exchange and substitution for such mutilated, destroyed or lost Note upon the cancellation of such mutilated Note or in lieu of and in substitution for such Note destroyed or lost, upon the holder's paying the reasonable expenses and charges of the University in connection therewith and, if the Note is destroyed or lost, its filing with the University evidence satisfactory to the University that the Note was destroyed or lost, and of its ownership thereof, and furnishing the University with indemnity satisfactory to the University.
Section 7. All covenants, stipulations, obligations and agreements of the University contained in the Note and this resolution shall be deemed to be covenants, stipulations, obligations and agreements of the University with the holder of the Note to the full extent permitted by the Constitution and laws of the Commonwealth of Virginia. No covenant, stipulation, obligation or agreement contained in the Note or this resolution shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future Visitor, officer, employee or agent of the University in his individual capacity. Neither any member of the Board nor any officer of the University shall be subject to any personal liability or accountability by reason of the issuance of the Note.
Section 8. The officers, agents and employees of the University are hereby authorized and directed to do all acts and things required of them by the provisions of this resolution and the Note for the full, punctual and complete performance of the terms, covenants, provisions and agreements contained in this resolution and the Note.
Section 9. This resolution shall take effect immediately upon its passage.
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding, dated as of _________, 1988, by and between The Rector and Visitors of the University of Virginia (the "University") and University of Virginia Hospitals ("Hospitals"), an operating division of the University, sets forth certain agreements and understandings of the parties concerning the making of an interfund loan (the "Loan") by the University to Hospitals in the amount of $22,500,000 in order to provide additional working capital for Hospitals, as follows:
1. By Article 2, Chapter 9, Title 23, Code of Virginia, 1950, as amended, there is created a corporation under the name and style of The Rector and Visitors of the University of Virginia (the "University") to be governed by a Board of Visitors (the "Board"), which is vested with the supervision, management and control of the University of Virginia at Charlottesville, Virginia.
2. Hospitals is an operating division of the University, being a separate financial reporting entity, with management responsibility for the operation of the University's hospital facilities.
3. Under the authority of Chapter 3, Title 23, Code of Virginia, 1950, as amended, and resolutions duly adopted by the Board and the Executive Committee of the Board, the University has heretofore issued, and there are currently outstanding, $95,386,796 Hospital Revenue Refunding Bonds (Series C) and $32,200,000 Variable Rate Demand Hospital Revenue Refunding Bonds (Series D) (collectively, the "Prior Bonds"), each of which series of Prior Bonds was issued to refund other series of hospital revenue bonds of the University issued previously to finance improvements and additions to the hospital and ancillary facilities operated by Hospitals.
4. The University is authorized by Article 2, Chapter 9, Title 23, Code of Virginia, 1950, as amended, to borrow money to effectuate any of its corporate purposes.
5. Management of Hospitals has requested the Board to authorize additional borrowing in order to provide additional working capital for Hospitals.
6. The Board has heretofore authorized the incurrence of a loan from The University of Virginia Health Services Foundation (the "Foundation") in the principal amount of $7,500,000 for the purposes hereinabove described and upon the terms and conditions
7. The Board has determined to make the Loan to Hospitals in the amount of $22,500,000 upon the terms and conditions hereinafter set forth, and Hospitals has agreed to accept the Loan.
8. The making of the Loan is in the best interests of the University and Hospitals.
9. The principal of and the interest on the Loan shall be payable solely from available funds of Hospitals, subject to the rights of the registered owners of the Prior Bonds and the rights of the holders of any additional Bonds issued pursuant to the Master Resolution adopted by the Executive Committee of the Board on November 30, 1984, as amended on May 30, 1985 (collectively, the "Master Resolution") and the holders of Parity Indebtedness (as defined in the Master Resolution) in and to the Net Revenues (as defined in the Master Resolution).
10. The principal amount of the Loan shall be due, subject to the right of prepayment hereinafter set forth, on the fifth anniversary of the date the Loan is funded; provided, however, that the due date of the Loan may be extended, at the option of the University, for an additional period of five years. The University shall exercise such option by delivering to the Vice President for Business and Finance of the University and the Director of Finance of Hospitals, not later than 30 days prior to the original due date of the Loan, written notice of its election to so extend the due date. In such event the University and Hospitals shall cause to be executed and delivered an amendment to the Memorandum of Understanding reflecting such extended due date.
11. The Loan shall bear interest as follows:
- (a) With respect to any proceeds of the Loan that have not been expended by Hospitals, the interest thereon shall be equal to the investment income, including any capital gains, realized thereon, such amount to be paid to the University by Hospitals promptly upon receipt. For purposes of this subparagraph, the purchase of an investment by Hospitals or by the University on behalf of Hospitals shall not be deemed to constitute an expenditure of proceeds of the Loan.
- (b) To the extent any proceeds of the Loan have been expended by Hospitals, the average outstanding balance for any calendar quarter shall bear interest, calculated on the basis of a year of 365/366 days and actual days elapsed, payable quarterly in arrears on each February 1, May 1, August 1 and November 1 at a rate per annum equal to the average rate earned on the Common Fund Short-Term Fund for the previous calendar quarter plus 1/2 of 1%. Such rate shall be recalculated quarterly.
Hospitals will maintain records and books of account in form sufficient to enable the calculations required by the preceding paragraph to be made in a timely manner, which records and books of account shall be available for inspection by the University, acting through its officers, agents, employees and other authorized representatives, at reasonable times and upon reasonable notice. Hospitals will provide prompt written notice to the Vice President of Business and Finance of the University of any expenditure of the proceeds of the Loan, determined as provided in paragraph 13 hereof, specifying the amount of such expenditure and the date on which it was made.
Both the principal of and the interest on the Loan shall be payable in such lawful money of the United States of America as at the time of payment thereof is legal tender for the payment of public and private debts. The principal of the Loan shall be payable, on the due date thereof, by interfund transfer on the books of the University and Hospitals. Payment of interest on the Loan shall be made by interfund transfer on the books of the University and Hospitals on each interest payment date.
12. The Loan may be prepaid at any time prior to the due date thereof, either in whole or in part, from any moneys that may be made available for such purpose, at the principal amount of the Loan to be prepaid, together with the interest accrued thereon to the date of prepayment, without penalty.
On the date of prepayment, moneys for such prepayment having been delivered to the University or an interfund transfer of an amount sufficient for such prepayment having been made on the books of the University and Hospitals, Hospitals' obligation with respect to the Loan or any part thereof so prepaid shall be discharged and any interest on the Loan or any part thereof so prepaid shall cease to accrue.
13. Simultaneously with the making of the Loan, the University shall credit the proceeds of the Loan and deposit the proceeds of the Note to an account which shall be held separate and apart from all other funds and accounts of the University and
14. All covenants, stipulations, obligations and agreements of the University and Hospitals contained in this Memorandum of Understanding shall be deemed to be covenants, stipulations, obligations and agreements of the University and Hospitals to the full extent permitted by the Constitution and laws of the Commonwealth of Virginia. No covenant, stipulation, obligation or agreement contained in this Memorandum of Understanding shall be deemed to be a covenant, stipulation, obligation or agreement of any present or future Visitor, officer, employee or agent of the University or Hospitals in his individual capacity. Neither any member of the Board nor any officer or employee of the University or Hospitals shall be subject to any personal liability or accountability by reason of the making of the Loan.
15. The officers, agents and employees of the University and Hospitals are hereby authorized and directed to do all acts and things required of them by the provisions of this Memorandum of Understanding for the full, punctual and complete performance of the terms, covenants, provisions and agreements contained in this Memorandum of Understanding.
THE RECTOR AND VISITORS OF
THE UNIVERSITY OF VIRGINIA
By: Vice President for Business and Finance
UNIVERSITY OF VIRGINIA HOSPITALS
By: Director of Finance
| Board of Visitors minutes October 7, 1988 | |