Proceedings of the Board of Regents (1963-1966)

JULY MEETING, 1965

961

Interest Sinking Fund Account or Collateral Account, if any (as provided in the
Loan Agreement) are less than the maximum debt service reserve required by said
provisions of the Loan Agreement, the Borrower shall procure and maintain
Use and Occupancy Insurance on each building, the revenues of which are pledged to
payment of the Bonds, in an amount sufficient to enable the Borrower to deposit in
the Bond and Interest Sinking Fund Account, out of the proceeds of such insurance,
an amount equal to the sum that would normally have been available for deposit
in such Account from the revenues of the damaged building during the time the
damaged building is non-revenue producing as a result of loss of use caused by the
perils covered by Fire and Extended Coverage Insurance. Where a Trustee is to be
or has been designated in connection with the Bonds, each such insurance policy
shall be acceptable to the Trustee and shall contain a loss payable clause making
any loss thereunder payable to the Trustee as its interest may appear.
SECTION 34. PARIETAL RULES. The Borrower shall establish and maintain so
long as any of the Bonds are outstanding, such parietal rules, rental rates and
charges for the use of the Project facilities and such other facilities the revenues of
which are pledged to the payment of the Bonds as may be necessary to (1) assure
maximum occupancy and use of said facilities and (2) provide together with any
other funds herein pledged to payment of the Bonds (a) the operating and maintenance expenses of said facilities, (b) the debt service on the Bonds, (c) the
required reserve therefore, and (d) the Repair and Replacement Reserve where
such reserves are required.
SECTION 35. PROPER RECORDS AND BOOKS. The Borrower covenants that it
will keep accurate financial records and proper books relating to the Project, other
facilities the revenues of which are pledged to secure the Bonds, and other pledged
revenue sources, and such records and books shall be open to inspection by the
Bondholders and their agents and representatives. The Borrower further convenants
that not later than 90 days after the close of each fiscal year it will furnish to the
Trustee and to any Bondholder who shall request same in writing, copies of audit
reports prepared by an independent public accountant, or where appropriate, by the
State auditing official, reflecting in reasonable detail the financial condition and
record of operation of the Borrower, the Project, other pledged facilities, and
other pledged revenue sources, including particularly the Borrower's enrollment, the
occupancy or degree of use of and rates charged for the use of, and the insurance
on, the Project and any other facilities the revenues of which are pledged in the
Loan Agreement, and the status of the several accounts and funds required by the
Loan Agreement.
SECTION 36. INVESTMENT OF FUNDS. Moneys on deposit to the credit of the
Bond and Interest Sinking Fund Account and/or the Repair and Replacement
Reserve Account shall, upon request by the Borrower, be invested by the Trustee
or other designated depository, in direct obligations of, or obligations the principal
of and the interest on which are guaranteed by, the United States Government.
Where the Borrower is required to maintain fixed amounts in such accounts, the
investments of such funds shall be valued in terms of current market value as of
June 30 and December 31 of each year.
SECTION 37. BOND REDEMPTION. So long as the Government holds any of the
Bonds, it will waive the non-callable provisions, redemption premiums, and publication of notice of call applicable thereto.
SECTION 38. INTEREST OF THIRD PARTIES. The Loan Agreement is not for
the benefit of third parties, including the holders from time to time of any of the
Bonds, and the Government shall be under no obligation to any such parties,
whether or not indirectly interested in said Agreement, to pay any charges or
expenses incident to compliance by the Borrower with any of its duties or obligations thereunder.
SECTION 39. INTEREST OF MEMBERS OF OR DELEGATES TO CONGRESS. No
member of or delegate to the Congress of the United States shall be admitted to
any share or part of this Agreement or to any benefit arising therefrom.
SECTION 40. BONUS OR COMMISSION. By execution of the Loan Agreement
the Borrower represents that it has not paid and, also, agrees not to pay, any
bonus, commission, or fee for the purpose of obtaining an approval of its application for the loan hereunder.