Proceedings of the Board of Regents (1936-1939)

726

SECOND OCTOBER MEETING, 1938

tories and the dining rooms to be operated in conjunction therewith and the
income derived therefrom.
The Obligor also agrees that it will pay for and cause to be made any and
all audits as may be reasonably required by the Trustee; and that it will employ
only such Certified Public Accountant or Accountants in making such audits as
shall be approved by the Trustee.
Section 7. Neither the girls' dormitory nor the men's dormitory nor the land
upon which they are built nor any other property of the University, excepting
only the net income and gross room rents as defined in this Article, shall be
security for or be levied upon and sold to satisfy any Dormitory Revenue
Bond. No recourse under or upon any obligation, covenant, stipulation, or agreement contained in this Agreement or in any Dormitory Revenue Bond or coupon
issued hereunder or caused by the creation of any indebtedness hereby authorized,
shall be had against the State of Michigan or the Obligor or any member of the
Obligor, individually; it being expressly understood and agreed that the Dormitory Revenue Bonds issued hereunder are secured by and payable only from gross
rents and net income as herein defined; and that no other liability whatsoever
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.
A rticle VI
Section 1. In event default shall be made in the due and punctual payment
of principal or interest on any Dormitory Revenue Bond 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 default shall
continue for a period of sixty (60) days after written notice thereof is given to
the Obligor by the Trustee, which notice the Trustee must give upon the written
request of the holders of twenty-five per cent (25%) in amount of Dormitory
Revenue Bonds then outstanding, the Trustee may:
a) Proceed to protect or enforce the rights of the Trustee and the holders
of the Dormitory Revenue Bonds either by mandamus to compel the Obligor to
perform each and every covenant herein contained, or by injunction to prevent
said Obligor from performing any act in violation of said covenants.
b) Designate a general manager or general managers to take charge of and
manage said dormitories or either of them; and when said Trustee shall do so,
the Obligor agrees to appoint the person or persons so designated as such manager
or managers with all the power and authority it can lawfully confer to control
and regulate the operation of said dormitories, or either of them, the condition of
service, the charges to be made therefor, and to hire and discharge all employees
and to fix their compensation; and the Obligor agrees to comply with and
enforce all orders and requirements of such general manager or managers, subject
only to such reasonable rules and regulations as it must make for the general
welfare of the students of the University of Michigan, and subject to the provisions of subdivision (c) of Section 3 of Article V.
c) Secure the appointment by a Court of competent jurisdiction of a Receiver
to take charge of, maintain, and operate said dormitories, or either of them, under
the jurisdiction of said Court.
Such rights and remedies shall be cumulative, and any two or more thereof
may be exercised by the Trustee successively from time to time.
The Obligor expressly authorizes the Trustee to bring any of the actions at
law or in equity hereinbefore mentioned, and hereby waives any immunity to
being proceeded against as herein authorized which may exist by reason of its
being a subdivision of State Government.
Section 2. The holders of a majority in aggregate principal amount of the
Dormitory Revenue Bonds 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.
Section 3. No holder of any Dormitory Revenue Bond or coupon secured
hereby shall have the right to institute suit, action, or proceeding at law or in
equity thereon or upon in respect to this Agreement unless such holder shall
previously have given written notice to the Trustee of the existing default and
the Trustee shall have been afforded reasonable opportunity to exercise its power
hereunder and shall have failed to do so. Nothing contained in this paragraph