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Resolutions of
The Board of Trustees

Lincoln University, PA
 

RESOLUTION 340
September 19, 2009

 
 
LINE OF CREDIT INCREASE                                                 RES340_091909

   


WHEREAS, The University, as part of its operating budget, receives monthly payments from the Commonwealth of Pennsylvania which based upon its 2008-2009 most recent fiscal year averaged approximately $1.2 million per month; and

WHEREAS, The General Assembly of the Commonwealth of Pennsylvania has not voted to approve the budget for the 2009-2010 fiscal year as of this date and it is anticipated that such approval may not occur for a matter of some months in the future; and

WHEREAS, The Commonwealth of Pennsylvania is expected to appropriate approximately $13,400,000 when it passes its budget; and

WHEREAS, The Commonwealth of Pennsylvania budget approval also is necessary for the Pennsylvania Higher Educational Assistance Agency (PHEAA) to operate; and

WHEREAS, PHEAA scholarships to Pennsylvania students who go to Lincoln University are expected to be approximately $1,400,000 of the Lincoln University budget for the 2009-2010 year; and

WHEREAS, The University has an immediate need to address the shortfall in its operational budget which has occurred through no fault or action on the part of the University and is a direct consequence of the University not receiving its monthly budget payment from the Commonwealth and scholarships from PHEAA; and

WHEREAS, On June 10, 2004, Lincoln University issued bonds which permit the line of credit to be increased to 15% of operating expenses of the most recently audited financial statements; and

WHEREAS, for Fiscal Year 2007-2008, Lincoln University’s audited operating expenses were $55,194,430; and

WHEREAS, for Fiscal Year 2008-2009, Lincoln University’s audited operating expenses are estimated to be at least $60,000,000; and

WHEREAS, The Board has determined that it is in the interest and advantage of the University that it pursue an increase in the Line of Credit to a maximum of Nine Million Dollars ($9,000,000) with Fulton Bank or other appropriate financial institution, (the “Lender”); and
 
WHEREAS, The Board of Trustees (the “Board”) of Lincoln University is familiar with the terms of a certain loan agreement by and between Fulton Bank (the “Lender”) and the University (“Loan Agreement”) and certain other agreements, documents, and instruments, including, without limitation, a certain promissory note executed in connection therewith (collectively, with the Loan Agreement, the “Loan Documents”) which evidences the existence of a Six Million Dollar Line of Credit for the University (the “Line of Credit”), as authorized by Board Resolution 182, approved by the Board of Trustees on September 18, 2004; now, therefore be it

RESOLVED, That the University is hereby authorized to borrow on an unsecured basis under the Credit Documents and all agreements, instruments and documents related thereto, and to incur liability under the terms and conditions of the Credit Documents and all agreements, instruments and documents related thereto, and that the President and Vice President of Fiscal Affairs of Lincoln University are each hereby jointly and expressly authorized and empowered to make such borrowings and incur such liabilities, as well as execute and deliver certificates under the Credit Documents on behalf of the University; and further

RESOLVED, That the amendments and modifications to the terms and conditions of the Loan Documents and such related agreements, instruments and documents as the Lender may require in connection with the increase in the Line of Credit shall be expressly approved and executed on behalf of Lincoln University by its President and Vice President of Fiscal Affairs and that upon execution thereof are hereby approved and adopted without further resolution on the part of this Board (all of the foregoing collectively with the Loan Documents, the “Credit Documents”); and further

RESOLVED, That the University be, and it hereby is, authorized and directed to enter into, deliver and perform its obligations and undertakings under each of the Credit Documents on the terms and subject to the conditions set forth therein provided however that the University shall be authorized an increase in its line of credit up to the amount of $9,000,000 until March 31, 2010, or as soon as funding is received from the Commonwealth the line of credit for the University shall revert back to the amount of $6,000,000 permanent line as established by Board Resolution 182 as approved by the Board of Trustees on September 18, 2004; and further

RESOLVED, That the form of resolutions, if any, required by the Lender to be adopted by the University in connection with the Credit Documents are hereby ratified, approved and adopted and are incorporated herein by reference as if set forth herein verbatim provided that a copy of such resolutions are attached hereto; and further

RESOLVED, That any and all actions heretofore and hereafter taken on behalf of the University in connection with the documents referred to in these resolutions and the transactions contemplated thereby are hereby ratified, confirmed and approved as the act and deed of the University.





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