Proceedings of the Board of Regents (1936-1939)

AUGUST MEETING, 1936

9

shall also out of the revenue of said dormitory, pay the insurance premiums
necessary to provide "rental value insurance" in a sum not less than One Hundred Thousand Dollars ($100,000.00) to guarantee against loss of rental income
occasioned by fire, windstorm, explosion, or other destruction of the dormitory,
in companies approved by the Trustee, and shall assign to and deposit with
said Trustee such insurance policies. Any sums received by the Trustee or the
Obligor by virtue of said "rental value insurance" shall be subject to the same
application as is provided hereunder for net income. The premiums of any
such insurance shall be treated as an operating expense of the dormitory.
Section 5. The Obligor agrees to furnish to the Trustee a written statement as of June 30 of each year on or before September 30 of each year, showing in detail the gross income from said dormitory from each source and the gross
operating expenses during the preceding twelve-month period and the net income as above defined, which report shall be certified by an officer of the
Obligor. The Obligor further agrees to permit the Trustee to examine at any
convenient time all of its books and records relating to the operation of said
dormitory and to the income derived therefrom.
Section 6. Neither the dormitory nor the land upon which it is built nor
any other property of the University, excepting only the net income as defined
in Section 1 of Article III, shall be security for or be levied upon and sold to
satisfy any Certificate of Indebtedness. No recourse under or upon any obligation, covenant, stipulation, or agreement contained in said Agreement or in any
Certificate of Indebtedness or coupons issued hereunder or caused by the creation of any indebtedness hereby authorized, shall be had against the State of
Michigan or any member or officer of the Obligor, or any of their successors,
individually, for the enforcement of any assessment or any legal or equitable
proceedings taken by virtue of any constitution, statute, or rule of law, however established, it being expressly understood and agreed that the Certificates
of Indebtedness and this Agreement and the obligations hereby created are solely the obligation of the Ooligor as a body corporate, and are secured by and
payable only out of such net income as defined herein; and that no other liability whatever shall attach to or be incurred by the State of Michigan, the
Obligor or any member or officer of the Obligor or its successors, all other liability, except as herein provided, being expressly waived.
ARTICLE IV
Section 1. In event default shall be made in the due and punctual payment
of principal or of interest on any Certificate of Indebtedness secured hereby or
in the due observance or performance of any other covenant, condition, or provision, herein required to be kept or performed by the Obligor, and such lastmentioned default shall continue for a period of thirty days after written notice
thereof to the Obligor by the Trustee, which notice the Trustee may give, and
upon written request of the holders of 25 per cent (25%) in amount of the
Certificates of Indebtedness then outstanding shall give, then in every such case
the Trustee may:
a) Declare the principal and interest of all Certificates of Indebtedness outstanding to be due and payable immediately, and thereupon such principal and
interest shall become due and payable immediately, anything in this agreement
or in the said Certificates of Indebtedness or coupons to the contrary notwithstanding:
b) Proceed to protect and enforce the rights of the Trustee and the holders
of the Certificates of Indebtedness in whatever manner may be lawful, whether
by the specific performance of any covenant or agreement herein contained or in
aid of the execution of any power herein granted, or by the enforcement of any
other appropriate legal or equitable remedy as may be most effectual to protect
and enforce the rights aforesaid. Such rights and remedies shall be cumulative,
and any two or more thereof may be exercised by the Trustee successively from
time to time.
Section 2. The holders of a majority in aggregate principal amount of the
Certificates of Indebtedness outstanding hereunder shall have the right to
direct the method of conducting any and all proceedings hereunder for the
enforcement of this agreement; but the Trustee shall not be obligated to take
any action under this agreement and said direction unless it shall first be tendered indemnity sufficient to pay all necessary expenses incidental thereto, including court costs and attorneys' fees.