Proceedings of the Board of Regents (1936-1939)

454 FEBRUARY MEETING, 1938
or subcontractors undertaking the construction of the Addition herein contemplated, such bonds to guarantee the performance of said contracts or subcontracts
as the Trustee, in its discretion, may require. The Regents may have any part
of the work, not to exceed Sixty Thousand Dollars ($60,000.00), done by their
own employees, and as to the work so done, no bond shall be required.
Section 5. The Trustee may, in its discretion, require the Regents to submit
to it for its approval, any or all contracts or subcontracts for the construction
of said Addition or for the furnishing and equipping of the same, and, when the
submission of any of said contracts shall have been requested by the Trustee,
The Regents shall not execute such contract so requested until the Trustees shall
have signified its approval thereof in writing.
Section 6. The Regents shall carry such insurance during construction as
the Trustee may request; such insurahce to be payable to the Trustee as its
interest shall appear.
ARTICLE IV
Section 1. The Regents covenant and agree that the principal and interest
of the Revenue Bonds issued hereunder shall be a first lien upon the membership
fees in said University of Michigan Union and upon the net income of said
University of Michigan Union; and said membership fees and the net income
therefrom are hereby pledged to the payment thereof. The Regents agree to
deposit with the Trustee all membership fees and all net income of the University
of Michigan Union up to the amounts required to pay principal and interest of
said Revenue Bonds, and to create and maintain a reserve for that purpose, at
the times and in the manner set forth in Section 1 of Article II hereof. The
Regents shall not assign, pledge, or otherwise encumber the membership fees or
the net income of said University of Michigan Union until all Revenue Bonds
issued hereunder shall have been paid. The term "net income" shall mean and
include all of the income received and to be received from the operation of said
University of Michigan Union, including rental of rooms and income from the
dining rooms operated in conjunction therewith, sales of refreshments and sundry
goods, and other service charges, after deducting from the aggregate thereof the
actual expenses for operation, maintenance, insurance, ordinary repairs to building
and equipment, and for setting aside a reserve of five per cent (5%) per annum,
beginning July 1, 1938, for replacement and purchase of necessary equipment, but
excluding any investment in additional lands and buildings. The amount set
aside each year for the above reserve shall be based upon the book value of
equipment and furnishings on June 30th of the preceding fiscal year. Such
reserve shall be kept in a special fund, and be used by The Regents only for
replacement and purchase of necessary equipment.
Section 2. Any amounts remaining of membership fees and net income of
the University of Michigan Union, after meeting all payments of principal and
interest currently due as herein provided for, and after the creating of the reserves
herein provided for, may be used by said Regents in their discretion.
Section 3. The Regents shall segregate from the fees charged and collected
from all full-time male students of the University of Michigan, so long as any
of said Revenue Bonds shall be outstanding, at the regular sessions, a membership
fee of $7.50 per year for the use of the privileges of said University of Michigan
Union, and shall segregate from the fees charged and collected from all full-time
male students of the Summer School a like membership fee of $1.50 for the
summer session; and all such membership fees shall be pledged to the payment
of said Revenue Bonds, except such surplus as may remain after providing for
payments of principal and interest and reserve therefor.
Section 4. The Regents shall at all times keep said University of Michigan
Union in continuous operation while the University is in session, except during
the summer sessions, when all or any part of it may be operated or closed, in
their discretion.
Section 5. The Regents shall, out of the revenue of said University of
Michigan Union, pay the insurance premiums to keep the building insured against
fire and other hazards, in an amount at least equal to the face value of all
Revenue Bonds outstanding, and the contents of said University of Michigan
Union insured for not less than One Hundred Seventy-Five Thousand
Dollars ($175,000.00), or the insurable value thereof, if less than $175,000.00,
in companies approved by the Trustee, and shall permit said Trustee to examine
such insurance policies. The proceeds of such insurance, in case of loss, shall be
applied by The Regents to the repair or restoration of the building and contents