Proceedings of the Board of Regents (1969-1972)

764

NOVEMBER MEETING, 1970

Section 5.08. TRUSTEE TO HAVE FIRST LIEN. The Trustee shall have
a first lien, for the use and benefit of the holders of the bonds, on all
Pledged Funds, as defined in this Article V, after the date when the project
shall be placed in operation, in part or wholly; and said Pledged Funds are
hereby pledged to meet all payments herein provided for.
The Borrower covenants and agrees that it will not make any assignment
or pledge or create any encumbrance on the Pledged Funds covered by this
Trust Indenture which shall be equal or prior to the lien and pledge of this
Trust Indenture while any of the bonds issued hereunder are outstanding.
Nothing herein contained shall in any way be construed to impair the
security of outstanding bonds designated as Northwood Apartments, Group
III, Revenue Bonds dated as of October 1, 1957, which have a first lien
on the net income of the existing apartments designated as Northwood
Apartments, Group III. The lien herein provided, as to that portion of the
Pledged Funds, designated and defined as "Northwood Apartments, Group
III, Excess Net Income" is only applicable to excess net income remaining
at the end of any fiscal year from the operation of said existing apartments
after all current requirements of said outstanding bonds and the reserves
therefor have been fully met in accordance with the requirements of the
Trust Agreement securing their issuance.
Section 5.09. SECURITY. Neither the Project nor the land upon which
it is built nor any other property of the University or of the Borrower,
except only the Pledged Funds as defined in this Article V, shall be security
for or be levied upon and sold to satisfy any bond issued hereunder.
No recourse under or upon any obligation, covenant, stipulation or
agreement contained in this Trust Indenture or in any bond or coupon
issued hereunder or caused by the creation of any indebtedness hereby
authorized shall be had against the State of Michigan, the Borrower, or
any member or officer of the Borrower, individually; it being expressly
understood and agreed that the bonds issued hereunder are secured by a
first lien on and a pledge of and payable only from the Pledged Funds, as
herein defined, and that no other liability whatsoever shall attach to or be
incurred by the State of Michigan, the Borrower, or any member or officer
of the Borrower, or its successors; all other liability, except as herein
provided, being expressly waived.
ARTICLE VI
REMEDY ON DEFAULT AND PROCEEDS THEREFROM
Section 6.01. REMEDY ON DEFAULT. In event default shall be made in
the due and punctual payment of principal or interest on any bond secured
hereby, or in the due observance or performance of any covenant, condition
or provision herein required to be kept or performed by the Borrower, and
such default, other than payment of principal and interest, shall continue
for a period of thirty (30) days after written notice thereof is given to the
Borrower 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
bonds then outstanding, the Trustee may:
(a) Proceed to protect or enforce the rights of the Trustee and the
holders of bonds, either by mandamus to compel the Borrower to perform