Proceedings of the Board of Regents (1963-1966)

JUNE MEETING, 1966

1547

the Bonds and, specifically and unqualifiedly, the Bonds then being
delivered to the Government.
SECTION 10. CONSTRUCTION FINANCING. The Borrower shall make
every effort to obtain interim financing from private sources. Prior to
entering into formal agreements for such financing, the Borrower shall
furnish the Government with (1) a satisfactory preliminary opinion of
bond counsel; (2) evidence of its ability to finance on reasonable terms
the cost of the Project up to the time the Bonds are ready for delivery;
and (3) evidence of the receipt of firm bids establishing that the Project
can be constructed within the approved estimated cost thereof.
In the event any loan under temporary financing should become due
prior to the time when the Bonds are ready for delivery, the Borrower
may apply to and, provided that the Borrower is in compliance with the
Terms and Conditions of this Loan Agreement, receive from the Government an advance against the Bonds in an amount sufficient to liquidate such temporary loan.
Should the Borrower be able to demonstrate to the Government's
satisfaction that interim financing on reasonable terms is not available,
the Government will consider requests for advances in anticipation
of the issuance of the Bonds. Requisitions for construction advances
shall be accompanied by such supporting data as the Government may
require. The Government will honor such requisitions in amounts and
at times deemed by it to be proper.
Any funds made available to the Borrower by the Government
pursuant to this Section shall be repaid in full from the first proceeds
derived from the sale of the Bonds, and shall bear interest at the rate
specified for the Bonds in the Loan Agreement from the date made
available to the date of repayment.
SECTION 11. PREREQUISITES TO LOAN DISBURSEMENTS. Prior to
the Government disbursing any portion of the loan proceeds, the Borrower shall present satisfactory evidence that:
(a) It is able to provide the furnishings and movable equipment
required for the operation of the Project, as specified in Section 3 hereof;
(b) It has deposited in the Construction Account such funds as are
necessary with the loan proceeds to assure completion of the Project;
and
(c) It is able to provide the Project site or sites free from all
encumbrances.
SECTION 12. CONSTRUCTION ACCOUNT. The Borrower shall set up
in a bank or banks which are members of the Federal Deposit Insurance
Corporation, or with the fiscal agency of the Borrower fixed by law, a
separate account or accounts (herein collectively called the "Construction Account") into which shall be deposited any temporary loans,
Government advances, and proceeds from the sale of the Bonds (except
accrued interest payments), and the additional funds, if any, required
by the provisions of the Loan Agreement to be furnished by the Borrower in order to assure the payment of all Project Costs. Moneys in
the Construction Account shall be expended only for such purposes as