If the Authority chooses not to replace or repair the portion of the 2000A
Project damaged, destroyed or taken, or if the Net Proceeds applied to the replacement
or repair of the 2000A Project is less than the total Net Proceeds received as a result of
such damage, destruction or taking, the Institution will pay the unused Net Proceeds to
the Authority to be applied to the prepayment of the principal portion the Basic
Payments due under the 2000A Note and hereunder.
(d) Excess Costs of Repair. If Net Proceeds applied to the
replacement or repair of the 2000A Project shall not be sufficient to pay in full such cost,
the Institution shall provide funds sufficient to pay so much of the cost thereof as may
be in excess of such Net Proceeds, if any, applied to such purpose. The Institution will
not by reason of the payment of such excess cost be entitled to any reimbursement
from the Authority or the Trustee or to any postponement or diminution of the Payments.
(e) Update to Exhibit A. Upon replacement of damaged, destroyed or
taken 2000A Project, the parties hereto shall execute a supplement to this 2000A Loan
Agreement in form and substance satisfactory to the Authority and the Trustee which
supplement shall modify the description of the 2000A Project set forth in Exhibit A
attached hereto.
Section 5.4. Liens. The Institution shall not create, incur or suffer to
exist, and has not created, incurred or suffered to exist, any lien, charge, security
interest or encumbrance on its interest in the 2000A Project other than any lien, charge,
security interest or encumbrance consented to by the Authority.
Section 5.5. Information. The Institution's chief financial officer shall, at
the reasonable request of the Authority, discuss the Institution's financial matters with
the Authority, the Trustee or their designees and provide the Authority and the Trustee
with copies of any documents reasonably requested by the Authority, the Trustee or
their designees.
As soon as practical, but in any case within thirty (30) days after receipt of
the Institution's audited annual financial statements for the prior fiscal year, the
Institution shall file with the Authority and the Trustee a certificate signed by its chief
financial officer stating that nothing has come to his or her attention that would lead him
or her to believe that the Institution is in default in the performance of any covenant
contained in this 2000A Loan Agreement or in any similar loan agreement between the
Authority and the Institution entered into with respect to the financing or refinancing of a
capital project under the Program or, if he or she is aware of any such default,
specifying each such default and what actions the Institution has taken, is taking or
proposes to take to cure such default.
Section 5.6. Maintenance of Existence, Merger, Consolidation, etc.
The Institution shall maintain its existence, except that it may dissolve or otherwise
dispose of all or substantially all of its assets and may consolidate with or merge into
17
another institution or permit one or more institutions to consolidate with or merge into it
if (1) it obtains the consent of the Authority and the Trustee, (2) the surviving, resulting
or transferee institution, if other than the Institution, (A) is an "educational institution"
within the meaning of the Act and (B) assumes in writing all of the obligations of the
Institution hereunder, (3) in the opinion of Bond Counsel such assumption does not
affect adversely the exclusion of interest on any Tax-Exempt Bonds from the gross
income of the recipients for purposes of federal income taxation, and (4) such action
does not result in any Event of Default. Alternatively, the Institution may dissolve or
otherwise dispose of all or substantially all of its assets and consolidate with or merge
into another entity if it prepays the 2000A Note and its obligations hereunder in full, in
accordance with the provisions of Section 4.8, and if it delivers to the Trustee and the
Authority an opinion of Bond Counsel to the effect that the applicable transaction does
not affect adversely the exclusion of interest on any Tax-Exempt Bonds from the gross
income of the recipients for purposes of federal income taxation.
Section 5.7. Maintenance of Tax Exemption. The Institution shall not
(1) take any action or approve the Trustee's taking any action or making any investment
or use of the proceeds of the 2000A Bonds that would cause the 2000A Bonds to be
"arbitrage bonds" within the meaning of Section 148 of the Code, including without
limitation the purchase by the Institution or any "related person" within the meaning of
Section 144(a)(3) of the Code, of the 2000A Bonds in an amount related to the
aggregate amount of the Institution's Payments hereunder, or (2) take any other action
that would adversely affect the exclusion of interest on any Tax-Exempt Bonds from the
gross income of the recipients thereof for federal income tax purposes.
Section 5.8. Taxes; Other Governmental Charges. The Institution shall
pay, as the same become due, all taxes and governmental charges of any kind
whatsoever that may be lawfully assessed, levied or imposed on the Authority or the
Institution with respect to the 2000A Project.
Section 5.9. Continuing Disclosure Undertaking.
(a) Purpose; Definitions. This Undertaking is being made by the Insti-
tution for the benefit of the holders of the 2000A Bonds and to assist the Participating
Underwriters in complying with the Rule, as such terms are defined below. The Institu-
tion acknowledges that it is undertaking primary responsibility for any reports, notices or
disclosures that may be required under this Section 5.9.
The following terms shall have the following meanings when used in this
Section 5.9:
"Annual Report" means any Annual Report provided by the Institution
pursuant to, and as described in, subsection (c).
"Dissemination Agent" means the Institution, acting in its capacity as
Dissemination Agent hereunder, or any successor Dissemination Agent designated in
18
writing by the Institution and which has filed with the Institution and the Authority a writ-
ten acceptance of such designation.
"Fiscal Year" means the twelve-month period, at the end of which the financial position of the Institution and results of its operations for such period are deter-
mined. Currently, the Institution's Fiscal Year begins July 1 and continues through
June 30 of the next year.
"holder" means any person who is a record owner or beneficial owner of
a 2000A Bond.
"Listed Events" means any of the events listed in subsection (b)(5)(i)(C)
of the Rule, which are as follows:
1. Principal and interest payment delinquencies.
2. Non-payment related defaults.
3. Unscheduled draws on debt service reserves reflecting financial
difficulties.
4. Unscheduled draws on credit enhancements reflecting financial dif-
ficulties.
5. Substitution of credit or liquidity providers, or their failure to per-
form.
6. Adverse tax opinions or events affecting the tax-exempt status of
the 2000A Bonds.
7. Modifications to the rights of the holders.
8. Bond calls.
9. Defeasances.
10. Release, substitution or sale of property securing repayment of the
2000A Bonds.
11. Rating changes.
"National Repository" means any Nationally Recognized Municipal Se-
curities Information Repository for purposes of the Rule.
"Participating Underwriter" means any of the original underwriters of the
2000A Bonds required to comply with the Rule in connection with the offering of such
2000A Bonds.
19
"Repository" shall mean each National Repository and each State Re-
pository.
"Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended
and officially interpreted from time to time.
"State Repository" shall mean any public or private depository or entity
designated by the Commonwealth as a state depository for the purpose of the Rule.
"Undertaking" shall mean the continuing disclosure undertaking as-
sumed by the Institution in this Section 5.9.
(b) Filing of Annual Reports. Not later than the date that the 2000A
Bonds are sold, the Institution shall, or shall cause the Dissemination Agent (if different
from the Institution) to, provide to each Repository the Institution's audited annual finan-
cial statements for the Fiscal Year ended June 30, [2000]. Thereafter, not later than ten
(10) months after the end of each Fiscal Year, commencing with the Fiscal Year ending
June 30, [2001], the Institution shall, or shall cause the Dissemination Agent (if different
from the Institution) to, provide to each Repository an Annual Report that is consistent
with the requirements of subsection (c). Not later than ten (10) days prior to such date,
the Institution shall provide the Annual Report to the Authority and the Dissemination
Agent (if applicable). In each case, the Annual Report (1) may be submitted as a single
document or as separate documents comprising a package, (2) may cross-reference
other information as provided in subsection (c), and (3) shall include such financial
statements as may be required by the Rule.
The annual financial statements of the Institution shall be prepared on the
basis of generally accepted accounting principles and will be audited by either the
Auditor of Public Accounts or a firm of independent certified public accountants. Copies
of the audited annual financial statements, which may be filed separately from the An-
nual Report, will be filed with the Repositories when they become publicly available.
If the Institution fails to provide an Annual Report to the Repositories by
the date required above, or to file its audited annual financial statements when available
as described above, the Institution shall send an appropriate notice to the Municipal Se-
curities Rulemaking Board, any State Repository and the Authority in substantially the
form attached hereto as Exhibit D.
(c) Content of Annual Reports. Each Annual Report required to be
filed hereunder shall contain or incorporate by reference, at a minimum, the following
information, all with a view toward assisting Participating Underwriters in complying with
the Rule: an update of the information on the page with the Institution's name at the top
in Appendix B to the Authority's Official Statement for the 2000A Bonds. Such informa-
tion may be incorporated by reference from other documents, including official state-
ments of debt issues of or on behalf of the Institution, which have been filed with each of
20
the Repositories or the Securities and Exchange Commission. If the document incorpo-
rated by reference is a final official statement, it must be available from the Municipal
Securities Rulemaking Board. The Institution shall clearly identify each such other
document so incorporated by reference.
(d) Reporting of Listed Events. The Institution will provide in a timely
manner to the Municipal Securities Rulemaking Board, to each State Repository, if any,
and to the Authority notice of any of the Listed Events with respect to the 2000A Bonds,
if material. The Institution does not undertake to provide the above-described notice in
the event of a mandatory, scheduled redemption, not otherwise contingent upon the oc-
currence of an event, if (i) the terms, dates and amounts of redemption are set forth in
detail in the Authority's Official Statement for the 2000A Bonds, (ii) the only open issue
is which 2000A Bonds will be redeemed in the case of a partial redemption, (iii) notice of
redemption is given to the Bondholders as required under the terms of the Master In-
denture, and (iv) public notice of the redemption is given pursuant to 1934 Act Release
No. 23856 of the Securities and Exchange Commission, even if the originally scheduled
amounts may be reduced by prior optional redemptions or purchases of the 2000A
Bonds.
(e)
Dissemination Agent. The Institution may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its Undertaking and
may discharge any such Agent, with or without appointing a successor Dissemination
Agent. If at any time there is not any other designated Dissemination Agent, the Institu-
tion shall be the Dissemination Agent.
(f) Amendment. Notwithstanding any other provision of this 2000A
Loan Agreement or the Master Indenture, the Institution may amend its Undertaking as
set forth in this Section 5.9 if such amendment is supported by an opinion of independ-
ent counsel with expertise in federal securities laws to the effect that such amendment
is permitted or required by the Rule.
(g) Additional Information. Nothing in this Section 5.9 shall be deemed
to prevent the Institution from disseminating any other information, using the means of
dissemination set forth in this Section 5.9 or any other means of communication, or in-
cluding any other information in any Annual Report or notice of occurrence of a Listed
Event, in addition to that which is required by this Section 5.9. If the Institution chooses
to include any information in any Annual Report or notice of occurrence of a Listed
Event, in addition to that which is specifically required by this Section 5.9, the Institution
shall have no obligation under this Section 5.9 to update such information or include it in
any future Annual Report or notice of occurrence of a Listed Event.
(h) Default. In the event of a failure of the Institution to file its Annual
Report, any person referred to in subsection (i) may take such actions as may be per-
mitted by law to secure compliance with the obligation of the Institution to file any An-
nual Report or to give notice of a Listed Event. In addition, the holders of not less than
a majority in aggregate principal amount of 2000A Bonds outstanding may take such
21
actions as may be permitted by law to challenge the adequacy of any information pro-
vided pursuant to this Section 5.9 or to enforce any other obligation of the Institution
hereunder. A default under this Section 5.9 shall not be deemed an event of default
under this 2000A Loan Agreement or the Master Indenture, and the sole remedy under
this Section 5.9 in the event of any failure of the Institution to comply with its Undertak-
ing shall be an action to compel performance. Nothing in this provision shall be deemed
to restrict the rights or remedies of any holder pursuant to the Securities Exchange Act
of 1934, the rules and regulations promulgated thereunder, or other applicable laws.
(i) Beneficiaries. This Undertaking shall inure solely to the benefit of
the Institution, the Authority, the Participating Underwriters, and the holders from time to
time of the 2000A Bonds, and shall create no rights in any other person or entity.
(j) Termination. The obligations of the Institution pursuant to its Un-
dertaking shall terminate upon the earlier to occur of the legal defeasance or final re-
tirement of all of the 2000A Bonds or payment in full of the 2000A Note.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default.
(a) Events of Default. An "Event of Default" or a "Default" shall mean,
whenever used in this 2000A Loan Agreement, any one or more of the following events:
(1) Failure by the Institution to pay, or cause the Commonwealth
to pay, when due, the Basic Payments to be made under the 2000A Note or
Section 4.2(a);
(2) Failure by the Institution (or its agents) to observe and
perform any covenant, condition or agreement on its part to be observed or
performed, other than as referred to in Section 6.1(a)(1) or in Section 5.9, which
failure shall continue for a period of thirty (30) days after notice, specifying such
failure and requesting that it be remedied, is given to the Institution by the
Authority or the Trustee, unless the Authority shall agree in writing to an
extension of such time;
(3) The entering of an order or decree appointing a receiver for
all or any part of the Institution or the 2000A Project with the consent or
acquiescence of the Institution or the entering of such order or decree without the
acquiescence or consent of the Institution if it shall not be vacated, discharged or
stayed within ninety (90) days after entry; or
22
(4) Any event of default shall have occurred and be continuing
under any similar loan agreement between the Authority and the Institution
entered into with respect to the financing or refinancing of a capital project under
the Program.
(b) Limitations. The provisions of Section 6.1(a)(2) are subject to the
following limitations: if by reason of acts of God, strikes, lockouts or other industrial
disturbances; acts of public enemies; orders of any kind of the government of the United
States or of the Commonwealth or any department, agency, political subdivision or
official of either of them, or any civil or military authority; insurrections; riots; epidemics;
landslides; lightning; earthquakes; fires; hurricanes; tornadoes; blizzards, or other
storms; floods, washouts; droughts; arrests; restraint of government and people; civil
disturbances; explosions; breakage or accident to machinery; partial or entire failure of
utilities; or any cause or event not reasonably within the control of the Institution, the
Institution is unable in whole or in part to carry out its agreements contained in this
2000A Loan Agreement, the Institution shall not be deemed in default during the
continuance of such inability. The Institution agrees, however, to use its best efforts to
remedy with all reasonable dispatch the cause or causes preventing it from carrying out
its agreements; provided, that the settlement of strikes, lockouts and other
disturbances shall be entirely within the discretion of the Institution, and the Institution
shall not be required to settle strikes, lockouts and other disturbances by acceding to
the demands of the opposing party or parties when such course is in the judgment of
the Institution unfavorable to the Institution.
(c) Extensions. The Authority shall not unreasonably withhold its
consent to an extension of the time for taking corrective action under Section 6.1(a)(2) if
corrective action is possible and is instituted by the Institution (or its agents) within the
thirty (30) day period and is diligently pursued until the failure is remedied.
Section 6.2. Notice of Default. The Institution shall give the Authority
and the Trustee notice of the occurrence of any event or condition which constitutes an
Event of Default or which may, with notice or lapse of time or both, constitute an Event
of Default immediately upon becoming aware of the existence thereof.
Section 6.3. Remedies on Default. Whenever any Event of Default
referred to in Section 6.1 shall have happened and be continuing, the Authority or the
Trustee shall, in addition to any other remedies provided herein or by law, have the
right, at its or their option without any further demand or notice, to take one or any
combination of the following remedial steps:
(1) Declare all Payments and all other amounts due under the 2000A
Note and hereunder to be immediately due and payable, and upon notice to the
Institution, the same shall become immediately due and payable by the Institution
without further notice or demand.
23
(2) Take any actions permitted under Section 23-30.29:3 of the Act, or
successor or similar provisions of law.
(3) Take whatever other action at law or in equity may appear
necessary or desirable to collect the amounts then due and thereafter to become
due hereunder or to enforce any other rights of the Authority or the Trustee
hereunder.
Section 6.4. Attorneys' Fees and Other Expenses. The Institution shall
pay on demand to the Authority or the Trustee, as the case may be and to the extent
permitted by law, the reasonable fees and expenses of attorneys and other reasonable
expenses incurred by either of them, in the collection of Payments or any other sum due
or the enforcement of performance of any other obligations of the Institution upon an
Event of Default.
Section 6.5. Application of Moneys. Any moneys collected by the
Authority or the Trustee pursuant to Section 6.3 shall be applied in the manner
described in Article VIII of the Master Indenture.
Section 6.6. No Remedy Exclusive; Waiver; Notice. No remedy herein
conferred upon or reserved to the Authority or the Trustee is intended to be exclusive,
and every such remedy shall be cumulative and shall be in addition to every other
remedy given under this 2000A Loan Agreement or now or hereafter existing at law or
in equity. No delay or omission to exercise any right, remedy or power accruing upon
any Event of Default shall impair any such right, remedy or power or shall be construed
to be a waiver thereof, but any such right, remedy or power may be exercised from time
to time and as often as may be deemed expedient. In order to entitle the Authority or
the Trustee to exercise any remedy reserved to it in this Article VI it shall not be
necessary to give any notice, other than such notice as may be required in this Article
VI.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Assignment by Institution. Neither the 2000A Note nor
this 2000A Loan Agreement may be assigned or encumbered nor may any interest in
the 2000A Project be assigned, transferred, sold or leased by the Institution for any
reason except to another Institution which assumes the obligations of the Institution
under the 2000A Note and this 2000A Loan Agreement; provided, that obsolete
portions of the 2000A Project may be transferred, sold or leased in the ordinary course
of business. No assignment of the 2000A Note or this 2000A Loan Agreement by the
Institution shall be made without the consent of the Authority.
24
Section 7.2. Notices. Unless otherwise provided herein, all demands,
notices, approvals, consents, requests, opinions and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered in person or
mailed by first class registered or certified mail, postage prepaid, addressed as follows
(a) if to the Authority, at
Virginia College Building Authority
c/o Department of Treasury
P. O. Box 1879
Richmond, Virginia 23218-1879
(b) if to the Institution, at
Virginia Commonwealth University
327 West Main Street, 1st floor
Richmond, Virginia 23284
(Attention: Alwyn D. Mottesheard, Director of Treasury Services); or
(c) if to the Trustee, at
The Bank of New York
101 Barclay Street, Floor 8W
New York, New York 10286
(Attention: Corporate Trust Trustee Administration)
The Authority, the Institution and the Trustee may, by notice given hereunder, designate
any further or different addresses to which subsequent demands, notices, approvals,
consents, requests, opinions or other communications shall be sent or persons to
whose attention the same shall be directed.
Section 7.3. Severability. In the event any provision of the 2000A Note
or this 2000A Loan Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render unenforceable any
other provision of the 2000A Note or this 2000A Loan Agreement.
Section 7.4. Successors and Assigns. The 2000A Note and this 2000A
Loan Agreement shall inure to the benefit of and shall be binding upon the Authority and
the Institution and their respective successors and assigns.
Section 7.5. Applicable Law; Entire Understanding. The 2000A Note
and this 2000A Loan Agreement shall be governed by the applicable laws of the
Commonwealth. The 2000A Note and this 2000A Loan Agreement express the entire
understanding and all agreements between the parties and may not be modified except
in writing and signed by the parties.
25
Section 7.6. Counterparts. This 2000A Loan Agreement may be
executed in several counterparts, each of which shall be an original and all of which
together shall constitute but one and the same instrument.
Section 7.7. Amendments. Except as provided in Sections 3.1 and 5.9,
this 2000A Loan Agreement and the 2000A Note may be amended only in accordance
with the provisions set forth in Article XI of the Master Indenture.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
26
IN WITNESS WHEREOF, the Authority and the Institution have caused
this Loan Agreement to be executed in their respective corporate names by their duly
authorized officers or agents, all as of the date first above written.
VIRGINIA COLLEGE BUILDING AUTHORITY
By Name: Stephen Hartwell
Title: Chairman
VIRGINIA COMMONWEALTH UNIVERSITY
By Name: Paul P. Jez
Title: Assistant Vice President for Business
Services and Treasurer
Exhibit A -- Description of 2000A Project
Exhibit B -- Form of 2000A Note
Exhibit C -- Form of Opinion of Counsel to Institution
Exhibit D -- Notice of Failure to File Annual Report
[Audited Annual Financial Statements]
27
730086v1
from 730164v1
15681.024
28
EXHIBIT A
DESCRIPTION OF 2000A PROJECT
Sanger Hall Improvements (16090)
Sciences Building (15883)
VCU Sports Medicine Center (16069)
