Volume 01: July 11, 1932–July 8, 1938

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There shall be and there is hereby created an account to be known as the "Bond and Interest Redemption Fund" (herein sometimes called the "Bond Fund"), which shall be used solely and only for the purpose of paying the principal of and interest on said bonds. No part of the gross revenues received in any month for the services and facilities rendered by the said buildings shall be used for any other purpose until there shall first have been set aside therefrom and paid into the Bond Fund the proper proportionate part of the next installment of interest and principal of the bonds as hereinafter more fully provided. During the first five years after the date when the said buildings are first put into operating service, the amount of said revenue so payable into the Bond Fund at t the end of each month shall equal one-fifth of the next maturing installment of interest and one-tenth of the next maturing installment of principal. During each of the following years (after the first five years) the amount so payable at the end of each month into the Bond Fund shall equal one-sixth of the next maturing installment of interest and one-twelfth of the next maturing installment of principal of bonds. In the event the gross revenue in any month shall be insufficient to make the aforesaid payments in full, any such deficiency shall be paid into such Bond Fund from the first gross revenues of the said buildings thereafter received, it being the intent of this section that during the first five years of operation the sums so paid into such fund shall be in excess of the actual requirements for the payment of principal and in terest during such years, and that all such excess sums paid into the Bond Fund from the operation or from any other source shall be held in said fund as a reserve for contingencies to insure against default in the payment of the principal and interest of said bonds. In the event that the sums paid into said fund in any period shall be insufficient to meet all payments of principal and interest falling due on the bonds in such period, any funds held in the reserve for contingencies may be used for such payments, but such reserve shall be reimbursed therefor from the first available revenue in excess of required payments of the then fiscal year, of the Bond Fund; provided, however, that the University

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shall not be obligated to make any further payments into said Bond Fund after enough bonds have been paid or retired so that the amount then held in said fund, including the reserve for contingencies, equals the amount of principal and interest that will be payable at the time of their maturity on all bonds then remaining outstanding.

There shall be set aside from the gross income and revenues of said buildings such fixed amount thereof as will be sufficient to pay the interest upon and principal of the bonds hereby authorized, and it is hereby determined that the amount to be so set aside into the said fund in addition to the reserve for contingencies, shall be in each year, a sum sufficient to meet the principal installment and interest due in such year.

The amount by which the payment in any fiscal year exceeds the aggregate amount of interest on and principal of said bonds becoming due in such year shall be held in said Bond Fund as a reserve for contingencies and used solely as herein provided.

Section 5. Nothing contained in Section 4 of this resolution shall prevent the monthly payment of funds required to be paid into the Bond Fund from being paid quarterly; provided,however, that the funds so paid quarterly shall equal an amount sufficient to pay the principal and interest of the outstanding bonds and to create the reserve for contingencies in the same manner as if the funds had been paid into said Bond Fund monthly as hereinbefore required.

Section 6. After making all payments into the Bond Fund as hereinabove provided, the remainder of said gross revenues shall be applied to (a) the payment of the reasonable current expenses of operation and maintenance of said buildings, and (b) to the creation of a reasonable depreciation fund therefor.

Section 7. The Treasurer of the State of North Carolina shall be the custodian of the Bond and Interest Redemption Fund provided for in Section 4 of this resolution.

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Section 8. It is hereby covenanted to and agreed by the said University that the holders of said bonds outstanding shall have a sole and exclusive first lien and pledge upon all of the gross receipts derived from the operation of said buildings and required by this resolution to be paid into the Bond Fund, including rentals from the aforesaid dormitories.

Section 9. It is hereby covenanted to and agreed by the said University that so long as any of the bonds herein authorized remain outstanding and unpaid, it will continuously operate and maintain the said two Dormitories and will fix and maintain such rates and service charges, and collect and account for all the income and revenues derived therefrom as will be sufficient in each fiscal year (1) to set aside and pay into the Bond Fund the respective amounts hereinabove provided for (2) to pay operation and maintenance costs of said buildings; and (3) to provide a reasonable depreciation fund for said buildings.

Section 10. The said University hereby irrevocably covenants, binds and obligates itself to and with the holder or holders of the bonds herein authorized, or any of them, that so long as any of the said bonds are outstanding said University will not pledge, mortgage or otherwise encumber the said buildings or any part thereof, or any revenues therefrom, and will not sell, lease or dispose of any of the said buildings; provided, however, that the University may issue additional bonds payable from the revenues of said buildings if such additional bonds are junior and subordinate in all r respects to the lien of the bonds herein authorized.

Section 11. The said University further covenants to and with the holders of said bonds that it will adopt reasonable mles and regulations governing the operation of said buildings so as to insure maximum occupancy of the said dormitories, and that it will maintain for the benefit of the holders of the bonds outstanding adequate insurance on said buildings sufficient to protect and save harmless the holders of said bonds from any and all loss.

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Section 12. Interest payable upon said bonds during the period of construction of the said dormitory buildings shall be paid from the proceeds of the grant made by the Federal Emergency Administration of Public Works in aid of the project.

Section 13. The proper officers are hereby authorized to execute said bonds, and the State Treasurer is hereby authorized to sell and deliver said bonds.

After discussion of the proposal submitted by Controller Woollen to increase the application now pending before PWA for extending the power plant at Chapel Hill, Mr. Tucker moved the adoption of the following Resolution:

A RESOLUTION AUTHORIZING THE UNIVERSITY OF NORTH CAROLINA TO FILE AN APPLICATION TO THE UNITED STATES OF AMERICA THROUGH THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS FOR A GRANT TO AID IN FINANCING ELECTRIC POWER AND HEATING PLANT IMPROVEMENTS AND DESIGNATING FRANK P. GRAHAM, PRESIDENT, AND CHAS. T. WOOLLEN, CONTROLLER, TO FURNISH SUCH INFORMATION AS THE GOVERNMENT MAY REQUEST.

Be it resolved by the Executive Committee of the Board of Trustees of the University of North Carolina:

Section 1. That Frank P. Graham, President, and Chas. T. Woollen, Controller, be and they are authorized to execute and file an application on behalf of The University of North Carolina to the United States of America for a grant to aid in financing the construction of electric power and heating plant improvements.

Section 2. That Frank P. Graham, President, and Chas. T. Woollen, Controller, be and they are hereby authorized and directed to furnish such information as the United States of America through the Federal Emergency Administration of Public Works may reasonably request in connection with the application which is herein authorized to be filed.

This Resolution was seconded by Mr. Whedbee and was adopted by unanimous vote of all members present.