 | Board of Visitors minutes February 9, 2007 |  |
ARTICLE VI
PARTICULAR COVENANTS
Section 6.1 Payment of Principal and Interest; Pledge of Pledged Revenues.
The University covenants that it will promptly pay or cause to be paid from the sources described herein the principal of and the interest on every Note issued under the provisions of this Resolution at the place or places, on the dates and in the manner provided herein and in such Notes, and any premium required for the retirement of such Notes by purchase or redemption, according to the true intent and meaning thereof. Except as otherwise provided in this Resolution, such principal, interest and premium are payable solely from Pledged Revenues, which Pledged Revenues are hereby pledged to the payment thereof and to the payment of any Parity Credit Obligations issued by the University in the future, which may include any interest rate swaps or other hedge mechanisms related to the Notes and any dedicated line of credit, standby bond purchase agreement or other liquidity facility related to the Notes, including any Liquidity Facility.
THE UNIVERSITY SHALL NOT BE OBLIGATED TO PAY THE PRINCIPAL OF OR INTEREST ON THE NOTES EXCEPT FROM THE SOURCES NOTED HEREIN AS PLEDGED THEREFOR. THE NOTES AND THE INTEREST THEREON SHALL NOT BE
Section 6.2 Reserved.
Section 6.3 Additional Indebtedness and Encumbrances.
Except as otherwise provided in this Section, nothing in this Resolution shall be construed as prohibiting or limiting in any way the right of the University to incur other Credit Obligations. Notwithstanding the foregoing, however, the University may only incur the following types of Credit Obligations in the event the conditions set forth below are met in each instance:
(a) Limitation on Parity Credit Obligations. The University may incur, assume, guarantee or otherwise become liable on any Parity Credit Obligation, but only if, prior to the incurrence of each such Parity Credit Obligation, an Authorized Officer of the University certifies in writing that (1) taking into account the incurrence of such proposed Parity Credit Obligation (i) the University will have sufficient funds to meet all of its financial obligations, including its obligations to pay principal of and interest on all Credit Obligations, for all Fiscal Years to and including the second full Fiscal Year after the later of (A) the issuance of such Parity Credit Obligation and (B) the completion of any facility financed with the proceeds of such Parity Credit Obligation, and (ii) such Authorized Officer has no reason to believe that the University will not have sufficient funds to pay all amounts due under all indebtedness of the University during the term of such proposed Parity Credit Obligation, and (2) to the best of his or her knowledge, the University is not in default in the performance and observance of any of the provisions of this Resolution. Any such Parity Credit Obligation shall be secured by a pledge of Pledged Revenues on a parity with the pledge of Pledged Revenues herein, unless expressly subordinated to the pledge hereof.
(b) Limitation on Section 9(c) Credit Obligations. The University may incur, assume, guarantee or otherwise become liable on any Credit Obligation pursuant to the provisions of Article X, Section 9(c) of the Constitution of Virginia, as such section may be amended from time to time, and may pledge and apply such portion of the Pledged Revenues as may be necessary to provide for the payment of any such Credit Obligation, the funding of reasonable reserves therefor, or the payment of operating and other reasonable expenses of the facilities financed in whole or in part with the proceeds of such Credit Obligation or facilities reasonably related to such facilities, and such pledge shall be senior and superior in all respects to the pledge of Pledged Revenues securing the Notes and any other Parity Credit Obligations, but only if, prior to the incurrence of each such Credit Obligation, an Authorized Officer of the University certifies in writing that (1) taking into account the incurrence of such proposed Credit Obligation (i) the University will have sufficient funds to meet all of its financial obligations, including its obligations to pay principal of and interest on all Credit Obligations, all Fiscal Years to and
(c) Limitation on Other Credit Obligations, Including Section 9(d) Credit Obligations. The University may incur, assume, guarantee or otherwise become liable on any Credit Obligation not described elsewhere in this Section 6.3, including any Credit Obligation incurred pursuant to the provisions of Article X, Section 9(d) of the Constitution of Virginia, as such section may be amended from time to time, and may pledge and apply such portion of the Pledged Revenues as may be necessary for the payment of any such Credit Obligation, the funding of reasonable reserves therefor, or the payment of operating and other reasonable expenses of the facilities financed in whole or in part with the proceeds of such Credit Obligation or facilities reasonably related to such facilities and such pledge shall be senior and superior in all respects to the pledge of Pledged Revenues securing the Notes and any other Parity Credit Obligations, but only if, prior to the incurrence of each such Credit Obligation, an Authorized Officer of the University certifies in writing that (1) taking into account the incurrence of such proposed Credit Obligation (i) the University will have sufficient funds to meet all of its financial obligations, including its obligations to pay principal of and interest on all Credit Obligations, for all Fiscal Years to and including the second full Fiscal Year after the later of (A) the issuance of such proposed Credit Obligation and (B) the completion of any facility financed with the proceeds of such proposed Credit Obligation, and (ii) such Authorized Officer has no reason to believe that the University will not have sufficient funds to pay all amounts due under all indebtedness of the University during the term of such proposed Credit Obligation, (2) to the best of his or her knowledge, the University is not in default in the performance and observance of any of the provisions of this Resolution, and (3) the University has received an opinion of Bond Counsel to the effect that such proposed Credit Obligation has been validly issued under the relevant provisions of the Constitution of Virginia.
(d) Limitation on Issuance of Indebtedness on a Parity with Qualifying Senior Obligations. Except for Credit Obligations issued pursuant to subsections (b) or (c) above or to refund any Qualifying Senior Obligation as described in subsection (e) below, no additional bonds or other obligations may be issued or incurred by the University on a parity with any Qualifying Senior Obligation.
(e) Limitation on Additional Encumbrances. The University shall not encumber the Pledged Revenues in any manner (except as permitted in connection with Credit Obligations issued pursuant to subsections (a), (b) or (c) above or to refund any Qualifying Senior Obligation as described below), unless any such encumbrance is made junior and subordinate in all respects to the liens, pledges, covenants and agreements of this Resolution. Notwithstanding anything to the contrary herein, however, the University may issue bonds to refund any Qualifying Senior
Section 6.4 Disposition of Assets.
The University may convey, sell or otherwise dispose of any property of the University as long as (1) such conveyance, sale or encumbrance is in the ordinary course of business, or (2) an Authorized Officer certifies in writing that, taking into account the conveyance, sale or other disposition of such property (i) the University will have sufficient funds to meet all of its financial obligations, including its obligations to pay principal of and interest on all Credit Obligations for all Fiscal Years to and including the second full Fiscal Year after such conveyance, sale or other disposition and (ii) such Authorized Officer has no reason to believe that the University will not have sufficient funds to pay all amounts due under all indebtedness of the University then outstanding.
Section 6.5 Insurance.
The University covenants that it will at all times carry or cause to be carried with a responsible insurance company or companies, qualified to assume the risks thereof, or that it will maintain an adequate program of self-insurance, in either case sufficient to provide the University such insurance in such amount and covering such risks as the University shall deem to be reasonable and desirable.
Section 6.6 Rights of Noteholders Not to Be Impaired.
Except as otherwise set forth herein, the University covenants that no contract or contracts will be entered into or any action taken which might impair or diminish the rights of the Noteholders.
Section 6.7 Further Instruments and Actions.
The University covenants that it will, from time to time, execute and deliver such further instruments and take such further action as may be required to carry out the purposes of this Resolution.
Section 6.8 Accurate Records and Accounts.
The University covenants that it will keep accurate records and accounts of all items of cost and of all expenditures relating to Pledged Revenues collected and the application of such Pledged Revenues.
The University further covenants that it will cause to be filed not later than the end of the ninth month following the close of each Fiscal Year mailed to all Noteholders who shall have filed their names and addresses with the Secretary of the Board for such purpose a report, signed by the Vice President and Chief Financial Officer of the University and by the Virginia Auditor of Public Accounts or by an independent certified public accountant or firm of certified public accountants to be approved by the Virginia Auditor of Public Accounts, setting forth for the preceding Fiscal Year, in reasonable detail, the financial condition of the University, including its statement of net assets as of the end of the preceding Fiscal Year and the related statements of revenues, expenses and changes in net assets and statement of cash flows for the preceding Fiscal Year.
Section 6.9 Recognized Accounting Principles.
The University covenants that all of the accounts and records of the University will be kept according to generally accepted accounting principles consistently applied.
Section 6.10 Tax Covenants.
(a) The University shall not use or permit the use of any proceeds of Notes or any other funds of the University, directly or indirectly, to acquire any securities or obligation, and shall not use or permit the use of any amounts received by the University, the Custodian, any trustee or the Issuing and Paying Agent with respect to the Series A (Tax-Exempt) Notes in any manner, and shall not take or permit to be taken any other action or actions, which would cause any Series A (Tax-Exempt) Note to be an "arbitrage bond" within the meaning of Section 148 of the Code. If at any time the University is of the opinion that for purposes of this subsection it is necessary to restrict or limit the yield on the investment of any moneys held under this Resolution the University shall so instruct the Custodian, any trustee or the Issuing and Paying Agent in writing, and such shall take such action as may be necessary in accordance with such issuance.
(b) The University shall not use or permit the use of any proceeds of Notes or any other funds of the University, directly or indirectly, in any manner, and shall not take or permit to be taken any other action or actions, which would result in any of the Series A (Tax-Exempt) Notes being treated as an obligation not described in Section 103(a) of the Code by reason of classification of such Series A (Tax-Exempt) Note as a "private activity bond," an "arbitrage bond" or "bond not in registered form" within the meaning of Section 103(b) of the Code.
(c) The University shall at all times do and perform all acts and things permitted by law and this Resolution which are necessary or desirable in order to assure that interest paid on the Series A (Tax-Exempt) Notes or any of them will be excludable from gross income for federal income tax purposes and shall take no action that would result in such interest not being excludable from gross income for federal income tax purposes.
(d) The University covenants that it shall file the information report with respect to the Series A (Tax-Exempt) Notes required by Section 149(e) of the Code (currently Form 8038-G) within the time period provided in such Section.
| Board of Visitors minutes February 9, 2007 | |