MINUTES OF THE. MEETING of the FINANCE COMMITTEE July 21, 1967

Transcription

1 $ $ 6 MNUTES OF THE. MEETNG of the FNANCE COMMTTEE July 2, 967 The Fnance Commttee convened at Kellogg Center at 8 o'clock for breakfast. The followng members were present: Messrs. Harlan, Hartman, Merrman, Nsbet, Smth, Stevens, Thompson, and Whte; Presdent Hannah, Treasurer May, and Secretary Bresln. Absent: No one. - The followng nvestments are recommended by S Forest Akers Fund Amount Securty Recommend sellng: 74 shs. NV Phlps Gloelampen 93 shs. Amercan Natural Gas Recommend purchasng: up to 5 shs. Dow Chemcal der, Stevens Approx. Prce & Clark and Mr. Earl Cress: Prncpal $,850 7,334 9,84 9,200 ncome $. $ $ Yeld 4.95% 5.00% 2.75% nvestment recommendatons Bouyoucos Fund Recommend sellng: 79 shs. NV Phlps Gloelampen 00 shs. Eastern Arlnes (out of 600) Recommend purchasng: up to 90 shs. Mnnesota Mnng & Mfg $ $ $,975 5,500 7,475 7,470 $ $ $ % 0.9%.55% Albert H. and Sarah A. Case Fund Recommend sellng: 05 shs. NV Phlps Gloelampen 495 shs. Amercan Natural Gas Recommend purchasng: up to 270 shs. Dow Chemcal $ $ $ 2,625 8,80 2,435 2,600 $ $,07 $ % 5.00% 2.75% Albert Case Fund Recommend sellng: 05 shs. NV Phlps Gloelampen Recommend purchasng: up to 30 shs. Mnnesota Mnng & Mfg. Harry L. Conrad Fund $ 2,625 $ % $ 2,490 $ 39.55% Recommend sellng: 50 shs. Amercan Natural Gas 38 $>,900 $ % Recommend purchasng: up to 25 shs. Dow Chemcal 80 $ 2,000 $ % Consoldated Fund Recommend sellng: 762 shs, NV Phlps Gloelampen 600 shs, Amercan Natural Gas Recommend purchasng: 400 shs. Dow Chemcsl up to 300 shs. Mnnesota Mnng & Mfg $ 9,050 22,800 $4, 850 $32, , 900 $56,900 $ 944,40 $2,084 $ $, % %.552 nsurance Fund Recommend sellng: $4,000 U.S. Treasury Bonds 3 7,8% due /5/68 99 $3,860 $ % Recommend purchasng: up to 75 shs. Dow Chemcal 80 $4,000 $ %

2 ^Fnance Commttee Meetng Mnutes, contnued July 2, 967 nvestment.;. Recommendatons Scudder, Stevens & Clark and Mr. Earl Cress, contnued recommendatons Approx. '' '! Jenson Fund Prce Prncpal ncome Yeld Amount Securty Recommend sellng: 368 shs. NV Phlps Gloelampen 668 shs. Amercan Natural Gas Recommend purchasng: up to 430 shs. Dow Chemcal $ 9,200 25,384 $34,584 $34,400 $ 456,269 $, O 5.007o $ o H. W. & E. A. Klare Recommend sellng: $ U. S. Treasury 4% due 2/5/80 89 Recommend purchasng: $2,000 Federal Natonal Mortgage Partcpaton Certfcates 5.0% due Retrement Fund $ 8,900 $,520 $ % $ % Recommend sellng: 3,56 shs. NV Phlps Gloelampen 2,663 shs. Amercan Natural Gas $78,900 0,94 $80,094 $3,93 5,060 $8, O 5.007o Recommend purchasng: up to 3,700 shs. Dow Chemcal 80 $296,000 $8, o Fred T. Russ Fund Recommend sellng: shs. NV Phlps Gloelampen 50 shs. Amercan Natural Gas Recommend purchas ng: up to 00 shs. Mnnesota Mnng & Mfg $ $ $ 2,775 5,700 8,475 8,300 $ $ $ c = Sknner Fund Recommend sellng: 05 shs. NV Phlps Gloelampen 25 $ 2,625 $ o Recommend purchasng: up to 30 shs. Dow Chemcal 80 $ 2,400 $ O Spartan Fund Recommend sellng: 53 shs. Amercan Natural Gas 38 $ 5,84 $ , Recommend purchasng: up to 70 shs. Dow Chemcal 80 $ 5,600 $ o On moton by Mr. Harlan, seconded by Mr. Hartman, t was voted recommendatons. to approve the above nvestment 2. Authorzaton for Mr. May to sell the 9 shares of Amercan Telephone and Telegraph stock from the Ethel C. Avery Trust Fund. On moton by Mr. Nsbet, seconded by Mr. Merrman, t was voted to approve the above nvestment recommendaton. Approval 3. Fnancng New Laundry Buldng Communcaton from Mr. May: The regular Board agenda ncludes an tem for the award of contracts for the constructon of the new Laundry Buldng. Ths proect wll, of course, have to be fnanced through charges for laundry and lnen servces to all of the resdence halls, dnng facltes, and departments whch have unform servce wth the laundry. t s expected that the Laundry account wll have an accumulated balance of approxmately $340,000 on June 30 of ths year and wll have earnngs of approxmately $00,000 next year, leavng approxmately $,000,000 to be amortzed from future earnngs or allocatons from auxlary enterprses.

3 Fnance Commttee Meetng Mnutes, contnued July 2, Communcaton from Mr. May, contnued n the regular agenda, have recommended the award of contracts for the new Laundry. Approval f the Board concurs, t would be my ntenton to recommend that we establsh an nternal {Fnancng New loan, as was done for the parkng ramp and bus system, n the amount of $,000,000 to be plaundry repad over a 5-year perod out of laundry and lnen servce earnngs and other auxlary Buldng revenues such as the concessons on vendng machnes, whch were prevously used to help \ pay for the Food Stores.! On moton by Mr. Stevens, seconded by Mr. Merrman, t was voted to approve tem Communcaton from Mr. May: At the June Trustees! meetng, reported recept of bds for the Graduate Dormtory. Because the bds exceeded our estmates, recommended and the Trustees approved that all general archtectural bds be reected. At that tme also reported that Central Electrc Motors had advsed that t was wllng to extend ts bd for 90 days wthout prce adustment and that the Sptzley Corporaton was wllng to extend ts bd, but would need a prce adustment to take care of hgher labor costs whch would be borne as a result of extendng the perod of completon of the proect from August of 968 to Aprl of 969. ; Approval prce {adustment on?bds for New [Graduate Dormtory Shortly after the Trustees f meetng, was advsed by Mr. Davd Bennnger, Presdent of Central Electrc Motors, that hs frm would also requre an adustment of ts prce to extend ts contract n the amount of $23,568, whch s approxmately 3% of ts contract. The Sptzley Corporaton has advsed by letter that t wll extend ts contract for $54, n makng the request for prce adustment, t should be noted that the daly rate for \ plumbers wll be ncreased from $48.80 to $54.24 on June, 968. The ncrease for electrcans s expected to be approxmately the same when ther new contract s negotated. have dscussed these bds wth the archtects, our own engneers and other contractors, and beleve that we should grant the requested ncreases and ask the contractors to extend ther bds. would lke approval from the Trustees of ths recommendaton n order that we may proceed pror to the September meetng to obtan bds on the archtectural work only On moton by Mr. Whte, seconded by Mr. Merrman, t was voted to approve the above recommendaton. [ 5. Mr. Cress met wth the Trustees to dscuss the fnancng of Holden Hall and related matters. He recommended the followng: Fnancng Program Purposes of Plan A. Refund Mchgan State Unversty Halls Revenue Bonds dated Aprl, 955 n followng amounts: $3,55,000 due May, % nterest rate 2,825,000 due May, % nterest rate $5,980,000 total These bonds wll be purchased from Northwestern Mutual Lfe nsurance Company and Lncoln Natonal Lfe nsurance Company, present owners, at 93% or $5,684,800, representng a dscount of $393,200. Terms for fnancng and Offcal Resolutons, Holden Hall, and Dormtory No. 7. Oakland Unversty B. To recover approxmately $6,700,000 of funds advanced by the Unversty toward the budget of $7,500,000 for Holden Hall. C. Offcal statements on fle wth the materals for ths meetng nclude basc terms and condtons for fnancng program. D. Unappled earnngs for fscal year from operaton of Brody Halls and Shaw Halls plus Bond and nterest Reserve Fund of $300,000 reduces funds requred to refund 955 bond ssue to approxmately $5,00,000. E. To provde requred funds there wll be two loans: ) $6,000,000 constructon loan dated August, 967 Partcpatng Banks Natonal Bank of Detrot Unon Bank & Trust Company, Natonal Assoc, Grand Rapds Old Kent Bank & Trust Company, Grand Rapds Cty Bank & Trust Company, Natonal Assoc., Jackson Genesee Merchants Bank & Trust Company, Flnt Ctzens Commercal & Savngs Bank, Flnt Ann Arbor Bank Second Natonal Bank of Sagnaw Bank of Commerce > Hamtramck Chemcal Bank 6c Trust Company, Mdland Peoples Natonal Bank & Trust Company of Bay Cty Frst Natonal Bank of Southwestern Mchgan, Nles Amount $3,000, , , , , , , , , ,000 00,000 00,000 $6,000,000

4 ffnance Commttee Meetng Mnutes, contnued July 2, 967 v- Terms for! 5. fnancng and ; Offcal \ Resolutons Holden Hall and Dormtory #7, Oakland Unversty \ Recommendaton by Mr. Cress for fnancng of dormtores, contnued.e. Provson for requred funds, contnued 2) $5,700,000 - wth the followng banks takng partcpaton: Detrot Bank & Trust Co., Detrot Old Kent Bank & Trust Co., Grand Rapds Frst Natonal Cty Bank of New York Total F. Term of 2 years from August, 967 for both bank loans provdes: $2,000,000 2,000,000,700,000 $5,700,000 ) Tmng of borrowng on long-term bass when markets mght be more favorable than at present 2) ncluson of planned Graduate Resdence Hall fnancng of approxmately $0,000,000 n overall permanent fnancng program. The Offcal Resolutons as presented by Mr. Cress and approved by Attorney Carr follow. RESOLUTONS OF THE BOARD OF TRUSTEES OF MCHGAN STATE UNVERSTY AUTHOR- ZNG A HOUSNG REVENUE FNANCNG N THE AGGREGATE AMOUNT OF $6,000,000 WHEREAS, the Board of Trustees of Mchgan State Unversty, a body corporate created by and exstng under the Consttuton of the State of Mchgan, and havng full consttutonal authorty over and general supervson of sad Mchgan State Unversty and the control and drecton of all expendtures from sad Mchgan State Unversty's funds n the exercse of ts consttutonal dutes, has determned that t s necessary and for the best nterests of Mchgan State Unversty, ts students and personnel that t: (a) construct a new resdence hall known as Holden Hall on the man campus of Mchgan State Unversty, located n East Lansng, Mchgan, to provde housng, dnng and appurtenant facltes for approxmately,232 students, whch resdence hall wll cost approxmately $7,500,000 (all of whch s hereafter referred to as Proect - Part ); and (b) n order to provde for the terms and provsons t deems best to so fnance Proect - Part, to pay n full and retre bonds desgnated as n Mchgan State College of Agrculture and Appled Scence Resdence Hall Revenue Bonds, 955 Seres, dated Aprl, 955 M whch were orgnally ssued n a prncpal aggregate amount of $3,400,000 so that the ncome and revenues of Shaw Hall and the Brody Dormtory Group (whch are presently pledged to repay sad bonds) wll be avalable to assst n the repayment of the wthn fnancng (all of whch s hereafter referred to as Proect - Part ); and WHEREAS, the land to be used for sad Proect - Part was acqured at no cost to the state; and WHEREAS, ths Board has from funds n ts possesson pad out the sum of $700,000 whch t legally used to pay part of the costs of sad Proect - Part ; and WHEREAS, n the opnon of ths board, t s necessary and expedent that the Unversty obtan the sum of $6,000,000 to pay part of the costs of constructng, furnshng and equppng Proect - Part, and to complete sad Proect - Part ; and WHEREAS, there has been submtted for the consderaton of ths Board a proposed Housng Revenue Fnancng and Securty Agreement whereby the sum of $6,000,000 wll be obtaned from Natonal Bank of Detrot, a natonal bankng assocaton of Detrot, Mchgan; and WHEREAS, pror to the tme of the consderaton of the wthn resoluton an nqury was made of all members of ths Board and all offcers of Mchgan State Unversty as well as all ts employees who are or wll be engaged n or connected wth the fnancng herenafter approved or the Proect Parts and as a representatve or agent of ths Board or Mchgan State Unversty, and the followng members of ths Board, such offcers and such employees > fully dsclosed to ths Board that he or she was a drector or employee (ncludng presdent, general manager or other smlar executve offcer) 5 or stockholder drectly or ndrectly of: Ann Arbor Trust Company, Natonal Bank of Detrot, Unon Bank & Trust Company, Grand Rapds, Mchgan, Old Kent Bank & Trust Company, Grand Rapds, Mchgan, Cty Bank & Trust Company, Jackson, Mchgan, Genesee Merchants Bank & Trust Company, Flnt, Mchgan, Ctzen's Commercal & Savngs Bank, Flnt, Mchgan, Ann Arbor Bank, Ann Arbor, Mchgan, Second Natonal Bank of Sagnaw, Sagnaw, Mchgan, Bank of Commerce, Hamtramck, Mchgan, Chemcal Bank & Trust Company, Mdland, Mchgan, Peoples Natonal Bank & Trust Company of Bay Cty, Bay Cty, Mchgan, Frst Natonal Bank of Southwestern Mchgan, Nles, Mchgan, or that he or she had a drect nterest n sad fnancng:.. Mr. Norman C. Weston, Senor Vce Presdent and Trust Offcer of the Natonal Bank of Detrot, s on the Executve Commttee and a Drector of Oakland Unversty Foundaton. Mr. Weston owns 273 shares of the Natonal Bank of Detrot common stock and s the owner of an ndvdual nterest n the Natonal Bank of Detrot's Employee Proft Sharng Plan whch holds 6,80 shares of the Natonal Bank of Detrot common stock.. The Messrs. Hannah, Varner, May and Bresln, Offcers of Mchgan State Unversty, are Trustees under a Trust Agreement dated October 28, 958 set up by Mr. Forest H. Akers whch owns,656 shares of the Natonal Bank of Detrot common stock; whch dsclosure s fully set forth above.

5 Fnance Commttee Meetng Mnutes, contnued July 2, 967 5* Recommendaton by Mr. Cress for fnancng.of dormtores, contnued F. Term for loans, and Offcal Resoluton, Holder Hall, contnued NOW, THEREFORE, BE T RESOLVED, that ths Board proceed to construct, furnsh and equp sad Proect - Part and complete Proect - Part ; and BE T FURTHER RESOLVED, that Mchgan State Unversty actng through ths Board obtan for such purposes $6,000,000 from Natonal Bank of Detrot all upon the terms and condtons more fully set forth n sad Housng Revenue Fnancng and Securty Agreement (herenafter referred to as the "Agreement ) and evdenced by a note (herenafter referred to as the "Note") 3 both of whch are approved as to content and form as set forth n the forms hereto attached and made a part of ths resoluton; and ;Terms for {fnancng and Offcal (Resolutons, Hoden Hall Jand Dormtory No. 7, Oakland JUnversty BE T FURTHER RESOLVED, that sad fnancng s to be for the term of approxmately two years at the followng nterest rates: (a) 3 5/8% per annum from August, 967 to maturty whch shall be August, 969; and (b) 6% per annum after maturty whch nterest shall be payable sem-annually each February and August untl ths fnancng s repad n full begnnng February, 968. The cash repayment thereof s to be made from and secured solely by a pledge of the housng revenues defned and more fully \ descrbed as Housng New ncome n sad Agreement and whch ths Board has estmated on the ; bass of past experence wll provde annual sums to be pad on the prncpal of and \ nterest on the Note equal to at least those set forth n Secton 7 of sad Agreement; and BE T FURTHER RESOLVED that ths Board wll covenant that, should t be unable to comply; wth affrmatve covenants contaned n Secton 4 (c) of sad Agreement on or before \ July 3, 969, t wll take all acton necessary, ncludng the adopton of the necessary \ approvng resolutons and enterng nto the necessary Trust Agreement, to ssue and delver!. to the Bank, as requred n Secton 4 (d) of sad Agreement, Bonds as defned n Secton 2 thereof whch shall be n a prncpal amount equal to all unpad, prncpal and nterest on sad Note on July 3, 969; whch shall bear nterest at 5% per annum; whch shall mature on February, 979; whch shall be secured by a frst len upon and payable solely from Housng Net ncome as defned n Secton 2 of sad Agreement; whch shall contan substantally the same provsons as are n the Sample Bond affxed to sad Agreement as Exhbt B; whch wll be n denomnatons of $5,000 or $,000 at the opton of the Bank; whch shall be delvered to the Bank n a fully marketable condton together wth a legal ; approvng opnon pf Dcknson, Wrght, McKean & Cudlp, Attorneys of Detrot, Mchgan, and whch wll be delvered to the Bank at the opton of the Bank on or before August 5, 969 f ths Board s for any reason unable to comply wth Secton 4(c) of sad Agreement; and L (. _, ;.,.. _ '..,._..,.,.. :,,. \ BE T FURTHER RESOLVED, that no oblgaton authorzed hereunder shall ever be or become a charge aganst the State of Mchgan, nor shall the same become a len or secured by any property real, personal or mxed of the State of Mchgan or ths Board, but all such oblgatons, ncludng prncpal and nterest, shall be payable solely from the sources ; descrbed n sad Agreement; and BE T FURTHER RESOLVED, that the proposed form of Agreement and Note as presented to ths Board and heretofore approved as to form and substance be ncorporated n the mnutes of ths meetng; and hereto, and sad Trustee shall be enttled to such estates, powers, rghts authortes, benefts, prvleges and mmuntes as are set forth n ths Resoluton! and sad Agreement; and \ BE.T FURTHER RESOLVED,, that John A. Hannah,-Presdent of Mchgan State Unversty, and; Jack Bresln, Secretary of the Board of Trustees of Mchgan State. Unversty, be and they are hereby authorzed, empowered and drected n the name of the Board and as ts ; corporate? act and deed to respectvely execute and attest the Agreement and Note substantally n the form approved by and made a part of ths Resoluton and to execute and delver such other \ documents as may by them and each of them be deemed to be necessary or expedent under or n connecton wth sad Agreement, sad Note, or,ths Resoluton; and BE T FURTHER.RESOLVED, that the.same offcers by and they are hereby authorzed and empowered and drected for and n the name of ths Board, and as ts corporate act and deed to make, consent to and agree to any changes n the terms and condtons of the sad / Agreement and Note whch they may deem necessary, expedent and proper at the tme of executon of sad Agreement and Note, but no such amendment shall change the provsons relatng to the amount to be obtaned, the nterest to be pad thereon, the payments ; requred to be made or the securty,pledged; provded, however, that nothng contaned heren shall be consdered as lmted the rght of.sad offcers to alter or change the date of ssue of sad Note or of the dates and tme for payment of nterest or prncpal; and BE T FURTHER RESOLVED, that.should t develop.that John A. Hannah, through llness, absence or otherwse, be unable to perform the acts he s heren authorzed, empowered and drected to perform, then n that case Phlp J. May, Vce Presdent for Busness and Fnance and Treasurer of Mchgan State Unversty s hereby authorzed, empowered and drected to perform any and all acts and deeds heren authorzed and drected to.be performed by sad John A. Hannah, and any actons so taken by sad Phlp J. May shall be as bndng \ on the Board of Trustees of Mchgan State Unversty as f performed by sad John A. Hannah

6 Fnance Commttee Meetng Mnutes, contnued July 2, 967 Terms for \ 5. Recommendaton by Mr. Cress for fnancng of dormtores, contnued Fnancng and : Offcal ] J F. Term for loans and Offcal Resoluton, Holden Hall, contnued Resolutons \ Holden Hall and BE T FURTHER RESOLVED, that should t develop that Jack Bresln, through llness, Dormtory No. 7: absence or otherwse be unable to perform the acts he s heren authorzed empowered and Oakland ; drected to perform, then n that case Merrll R. Person, Assstant Treasurer of Unversty Mchgan State Unversty, s hereby authorzed, empowered and drected to perform any and all acts and deeds heren authorzed and drected to be performed by the sad Jack Bresln, and any acton so taken by sad Merrll R. Person shall be as bndng upon the Board of Trustees of Mchgan State Unversty as f performed by the sad Jack Bresln. BE T FURTHER RESOLVED, that sad Phlp J. May s authorzed, f he so desres, to sgn sad Agreement and Notes as P. J. May. BE T FURTHER RESOLVED, that Ann Arbor Trust Company and Natonal Bank of Detrot be and they are hereby authorzed to rely on the contnung effect of these resolutons untl recept by each of them of notce n wrtng from ths Board of any alteratons or amendments thereto. HOUSNG REVENUE FNANCNG AND SECURTY AGREEMENT THS AGREEMENT made and entered nto as of the st day of August, 967, between the BOARD OF TRUSTEES OF MCHGAN STATE UNVERSTY, a body corporate created by and exstng under the consttuton of the State of Mchgan (herenafter called the "Unversty"), NATONAL BANK OF DETROT, a natonal bankng assocaton of Detrot, Mchgan, (herenafter called the "Bank ) and ANN ARBOR TRUST COMPANY, a Mchgan corporaton, of Ann Arbor, Mchgan, (herenafter called the "Trustee"). WTNESSETH: WHEREAS, the Board of Trustees of Mchgan State Unversty, a body corporate created by and exstng under the Consttuton of the State of Mchgan, and havng full consttutonal authorty over and general supervson of sad Mchgan State Unversty and the control and drecton of all expendtures from sad Mchgan State Unversty's funds n the exercse of ts consttutonal dutes, has determned that t s necessary and for the best nterests of Mchgan State Unversty, ts students and personnel that t: (a) construct a new resdence hall known as Holden Hall on the man campus of Mchgan State Unversty, located n East Lansng, Mchgan, to provde housng, dnng and appurtenant facltes for approxmately,232 students, whch resdence hall wll cost approxmately $7,500,000 (all of whch s hereafter referred to as Proect - Part ); and (b) n order to provde for the terms and provsons t deems best to so fnance Proect - Part, to pay n full and retre bonds desgnated as "Mchgan State College of Agrculture and Appled Scence Resdence Hall Revenue Bonds, 955 Seres, dated Aprl, 955" whch were orgnally ssued n a prncpal aggregate amount of $3,400,000 so that the ncome and revenues of Shaw Hall and the Brody Dormtory Group (whch are presently pledged to repay sad bonds) wll be avalable to assst n the repayment of the wthn fnancng (all of whch s hereafter referred to as Proect - Part ); and WHEREAS, ths Board has from funds n ts possesson pad out the sum of $700,000 whch t legally used to pay part of the costs of sad Proect - Part ; and WHEREAS, n the opnon of ths board, t s necessary and expedent that the Unversty obtan the sum of $6,000,000 to pay part of the costs of constructng, furnshng and equppng Proect - Part, and to complete sad Proect - Part ; and WHEREAS, there has been submtted for the consderaton of the Board a proposed Housng Revenue Fnancng and Securty Agreement whereby the sum of $6,000,000 wll be obtaned from Natonal Bank of Detrot, a natonal bankng assocaton of Detrot, Mchgan; and WHEREAS, the Unversty has good ttle to the land on whch sad resdence hall wll be constructed, whch land was acqured at no cost to the State; and WHEREAS, the Unversty by proper resoluton has determned to obtan by means of a separate fnancng the sum of $5,700,000 whch together wth funds from the wthn fnancng shall be used to allow the Unversty to proceed mmedately to construct, furnsh and equp the remander of Proect - Part, all pendng the ssuance and sale of certan revenue bonds descrbed hereafter; and WHEREAS y the Bank s wllng to furnsh sad funds for the sad purpose upon the terms and condtons more fully set forth heren; and WHEREAS, the amount of funds needed to assst n payng the costs to construct, furnsh and equp sad Proect - Part and to complete sad Proect - Part s $6,000,000; and WHEREAS, the Unversty, by proper resoluton dated July 2, 967, has determned to obtan, by means of a Housng Revenue Fnancng the sum of $6,000,000 from Natonal Bank of Detrot, to be used to allow the Unversty to proceed mmedately wth Proect - Part and Proect - Part ; and 3

7 Fnance Commttee Meetng Mnutes, contnued July 2, Recommendaton by Mr. Cress for fnancng of dormtores, contnued F. Term for loans and Offcal Resoluton/ Holden Hall, contnued WHEREAS, the Bank s wllng to furnsh the aforementoned' funds respectvely for the sad purposes upon the terms and condtons more fully set forth heren; and WHEREAS, the Trustee s wllng to accept the trust and assume the dutes as Trustee for the sad purposes upon the terms and condtons more fully set forth heren; NOW, THEREFORE, n consderaton of the premses and the mutual agreements heren contaned, the partes hereto do hereby agree as follows: SECTON 5867 Terms for Fnancng and Offcal Resolutons Holden Hall and Dormtory No. 7 Oakland Unversty (a) Agreement of Bank. AGREEMENT The Bank agrees to make avalable to the Unversty and the Unversty agrees to obtan from the Bank on the date on whch ths Housng Revenue Fnancng and Securty Agreement (herenafter referred to as the "Agreement ) shall be sgned and delvered, the sum of $6,000,000. Such fnancng shall be evdenced by the Note of the Unversty, (n the form annexed as Exhbt A) and t shall bear nterest as provded n sad Exhbt A. t shall be payable solely from the funds or bonds n the manner heren stpulated (sad Note s heren sometmes referred to as the "Note )- (b) Agreement of Trustee. The Trustee for tself and ts successors agrees to accept the trust and assume the dutes as Trustee as mposed n the manner heren stpulated on the date as of whch ths ; Agreement shall be sgned. (c) Lmtaton of Oblgatons. No oblgaton hereunder shall ever, be.or become, a charge aganst the general fath and credt of the State of Mchgan or the Unversty, nor shall the same become a len on or secured by any property real, personal or mxed of the State of Mchgan or the Unversty, but all such oblgatons, ncludng prncpal and nterest, shall be payable solely from the; sources descrbed heren. SECTON 2 DEFNTONS ; Board; The term State Unversty. 'Board as used heren shall mean the Board of Trustees of Mchgan Fscal Year: The term "year" as used heren shall have reference to the fscal year employed by the Unversty n keepng ts books of account, to-wt: the twelve consecutve calendar months commencng July and endng June 30, unless otherwse mutually agreed. Note: The term "Note" shall mean and nclude the note to be prepared n the form attached hereto as Exhbt A, whch shall be n the face amount of $6,000,000 and shall be payable to Natonal Bank of Detrot, all n accordance wth ts terms and the provsons of the Agreement. Proect - Part : The term "Proect - Part shall mean and nclude the constructon, furnshng and equppng of a new resdence hall complex, presently desgnated as Holden Hall to be located on the man campus of Mchgan State Unversty n East Lansng, Mchgan, and whch when completed wll provde housng, dnng and appurtenant facltes for approxmately,232 students attendng sad Unversty. Sad Complex wll consst of dormtory facltes and a food servce faclty. t Proect * Part : The term "Proect - Part shall mean and nclude the payment n full and retrement of bonds desgnated as "Mchgan State College of Agrculture and Appled Scence, Resdence Hall Revenue Bonds, 955 Seres, dated Aprl, 955" whch were orgnally ssued n the aggregate amount of $3,400,000. The amount necessary to completely refund sad bonds as of August, 967 s approxmately $4,900,000, all of whch wll come from ths fnancng.! Housng Net ncome: The term "Housng Net ncome" shall mean and nclude: All of the ncome receved and to be receved from the operaton of the Brody Dormtory Group, : ncludng, but not lmted to, charges for board, rental of rooms and other servce charges made and collected n the operaton of the dormtory facltes and marred student apartments, all board or food servce charges payable by any other students or faculty member utlzng the dnng facltes of whatever nature theren and all other revenues derved from the operaton of the sad followng sources after deductng from the aggregate thereof the actual expenses of operaton (ncludng part or all'of the costs of lght, heat, power ; and water when and f charged, n whle or n part, as an actual expense of operaton), admnstraton costs (consstent wth heretofore establshed accountng procedures, but excludng all- general admnstratve expenses of the Unversty) ordnary mantenance and : repars of the buldng and renovaton and replacement of the furnture and equpment theren contaned and an allocated share of the nsurance premums. \

8 Fnance Commttee Meetng Mnutes/ contnued July 2, 967 Terms for Fnancng and Offcal Resolutons Holden Hall and Dormtory No. 7 Oakland Unversty 5- Recommendaton by Mr. Cress for fnancng of dormtores, contnued F. Term for loans, and Offcal Resoluton, Holden Hall, contnued Brody Dormtory Group: The term "Brody Dormtory Group shall have reference to exstng facltes of ths name whch nclude sx separate buldngs wth lvng accommodatons and a central dnng commons part of whch were bult n and the remander of whch were bult n on the campus of Mchgan State Unversty n East Lansng, Mchgan, whch provde housng, dnng and appurtenant facltes for 2,746 students, and whch has produced $737,000 of net revenues annually n the years 96 to 966. Ths Brody Dormtory Group nclude four men f s dormtores, Armstrong Hal, Baley Hall, Bryan Hall and Emmons Hall, and two women's dormtores, Butterfeld Hall and Rather Hall as well as the central dnng faclty whch serves all dormtores. Bonds: The term "Bonds" shall mean certan revenue bonds of Mchgan State Unversty whch shall be n a prncpal amount equal to all unpad nterest and prncpal hereunder on July 3, 969; whch shall mature on February, 979; whch shall bear nterest at 57 O per annum; whch shall be secured by a frst len upon and shall be solely payable from the Housng Net ncome; whch shall be substantally n the form of, and shall contan substantally the same provsons as are n the Sample Bond affxed hereto as Exhbt B; whch wll be n denomnatons of $5,000 or $,000 at the opton of the Bank; and whch shall be delvered to the Bank on August, 969, f the Unversty fals for any reason to comply wth any covenant contaned n Secton 4 (c) below. These Bonds shall be payable n accordance wth a Trust Agreement namng Ann Arbor Trust Company as Trustee and contanng substantally the same provsons as the wthn agreement except for the change n the maturty date and nterest rate, the dfferent prepayment provsons set forth n Exhbt B, and such addtonal provsons as may be necessary because bonds are nvolved. nsurance Proceeds: The term "nsurance Proceeds" shall mean any and all nsurance payments made to the Unversty or the Trustee on nsurance as provded for n Secton 0 below. SECTON 3 PREPAYMENT OF THE NOTE Upon 5 days' wrtten notce to the Trustee, a copy of whch shall be delvered to the Bank, the Unversty may at any tme, or as provded n Secton 0, prepay the Note n whole (or n part) by prepayng the prncpal amount so to be prepad, together wth accrued nterest, to the Trustee, who shall n turn delver these funds to the Bank. A premum of 2% of the prncpal balance so prepad, shall accompany any prepayment so made pror to August, 968. n makng any prepayments heren provded for, the Unversty reserves the rght to use any funds n ts possesson for that purpose. No such prepayment shall reduce the amount of the fxed prncpal and nterest nstallments requred to be pad on the Note by the terms thereof, all such prepayments shall be appled to nstallments of payments on the Note n the nverse order of ther maturtes. SECTON 4 AFFBMATVE COVENANTS OF THE UNVERSTY The Unversty covenants and agrees as follows: (a) All funds obtaned hereunder shall be mpressed wth a trust and used, together wth other funds referred to heretofore, for the purpose of assstng n the payment of the constructng, furnshng and equppng of Proect - Part and for the purpose of completng Proect - Part. (b) The balance remanng unpad on the Note, together wth accrued nterest thereon shall be repad from the specfc funds as requred and descrbed n Secton 7 hereof. (c) t wll ssue, sell and delver notes or bonds n prncpal amounts suffcent to pay all prncpal and nterest outstandng under ths fnancng whether due yet or not, and delver all of the proceeds from the sale on sad notes or bonds on or before July 5, 969 to the Trustee for delvery to the Bank to repay the amounts unpad under ths fnancng ncludng accrued nterest thereon. (d) n the event the notes or bonds provded for n subparagraph (c) hereof cannot be sold before July 5, 969, then the Unversty shall take all steps and actons whch may be necessary or requred to delver to the Bank n a marketable form and condton together wth the legal approvng opnon of Dcknson, Wrght, McKean and Cudlp, the Bonds, as defned n Secton 2 above, n the form and wth the provsons contaned n the sample bond, Exhbt B, attached hereto. Such delvery shall occur on August, 969 (e) t wll mantan and operate the Brody Dormtory Group as requred n Secton 9 below. (f) t has estmated on the bass of past experence that the Brody Dormtory Group wll at least produce suffcent Housng Net ncome to meet the payment schedule set forth n Secton 9, subparagraph (b).

9 Fnance Commttee Meetng Mnutes, contnued July 2, Recommendaton by Mr. Cress for fnancng of dormtores, contnued F. Term for loans, and Offcal Resoluton, Holden Hall, contnued (f) t wll carry standard form fre and extended coverage nsurance, rental value nsurance, use and occupancy nsurance, and publc lablty nsurance on the Brody Dormtory Group, whch polces or satsfactory evdence of nsurance shall be deposted wth the Trustee and the proceeds of whch (except for the publc lablty nsurance) shall be payable to the Trustee, all n accordance wth Secton 0 below. (h) The Brody Dormtory Group s furnshed and equpped and s presently occuped. () t wll requre full dsclosure of all drect or ndrect nterests of all members of the Board; of all offcers of and employees of Mchgan State Unversty, who are or wll be engaged n any constructon contract, sub-contract or agreement entered nto for the purpose of constructng Proect - Part as an agent or representatve of the Board or Mchgan State Unversty and any party contracted wth ncludng bankng, bondng, and nsurance companes. Such drect or ndrect nterest shall nclude beng a drector, employee (ncludng presdent, general manager or other smlar executve offcer), or stockholder drectly or ndrectly of such contractng party. SECTON 5 RELEASE OF PROCEEDS t s agreed between the partes that on the date called for under Secton l(a) hereof, the Bank wll release all funds to the Trustee, who, n turn wll, (a) proceed to mmedately retre the bonds descrbed n Proect - Part and (b) release the remander of such funds to the contractor as the work progresses on Proect - Part to provde funds for constructon and equpment as the work progresses as the archtect shall from tme to tme estmate and certfy, or to remburse the Unversty for funds advanced by t for such purposes. Such release of funds to the Unversty shall be made by the Trustee upon the presentaton to t of a wrtten requston by the Unversty settng forth the cost ncurred for whch funds are to be released, and the certfcate of the Unversty that such costs and expenses were necessarly ncurred n the constructon of the Proect - Part and are reasonable and proper. The Unversty shall furnsh to the Trustee a statement showng the cost of furnshngs and equpment for the Proect - Part, and upon the Trusteed approval thereof, the Trustee wll release to the Unversty from the funds so held the amounts requred to pay for such furnshngs and equpment t s expressly agreed by the Trustee and the Unversty that all funds provded hereunder except those for accomplshng Proect - Part whether n the possesson of the Trustee or the Unversty, shall be mpressed wth a trust and shall be used solely for the purpose of payng costs ncdental to the constructon, furnshng and equppng of the Proect - Part, as agreed upon heren. The Unversty agrees that should any funds obtaned from ths fnancng reman unexpended followng the completon of Proect - Part and Proect - Part, any such funds wll mmedately be appled by the Trustee toward the repayment of the wthn fnancng n accordance wth the provsons of Secton 3, above, but wthout any prepayment penalty. SECTON 6 PLEDGE OF REVENUES Housng Net ncome as defned n Secton 2 above s rrevocably pledged as securty for the payment n full of the Note and accrued nterest thereon and for the performance of the covenants heren from and after the date when ths Agreement shall take effect, and the Unversty hereby assgns and pledges to the Trustee, and grants to the Trustee for the beneft of the Bank a securty nterest n sad Housng Net ncome. The Unversty may, subect to the requrements of Secton 3, at any tme after ths Agreement takes effect use the followng to retre ths fnancng, (and the Unversty covenants t wll not use any of such funds for any other purpose untl ths fnancng s retred): (a) Any proceeds whch are receved from the sale of notes or bonds descrbed n Secton 4(c) above. (b) Any nsurance proceeds whch are receved and requred to be pad to the Trustee pursuant to Secton 0 below. (c) The Bonds as defned n Secton 2, above, so long as they are delvered n accordance wth the requrements set forth n Secton 4(d). The Unversty agrees to execute and delver to the Trustee as of the date on whch the Note s dated and funds dsbursed as requred n Secton l(a) hereof, a Fnancng Statement or Fnancng Statements coverng the foregong securty n such form as shall be satsfactory to the Trustee and the Bank, and the Bank shall cause the same to be fled n accordance wth the provsons of the Unform Commercal Code as enacted n Mchgan, 5869 Terms for f nane ng and Offcal Resolutons Holden Hall and Dormtory No. 7 Oakland Unversty

10 5870 Terms for Fnancng and Offcal Resolutons Holden Hall and Dormtory No. 7 Oakland Unversty [Fnance Commttee Meetng Mnutes, contnued July 2, Recommendaton by Mr. Cress for fnancng of contnued T F. Term for loans, and Offcal Resoluton, SECTON 7 ; PAYMENTS TO TRUSTEE The Unversty agrees that t wll set asde and pay out to the Trustee all Housng Net ncome as pledged hereunder, not less than ffteen (5) days pror to February, 968, August, 968 and ffteen (5) days pror to each February st and August st thereafter untl the Note s pad n full, payments of prncpal and nterest (the total of whch s then to be pad by the Trustee to the Bank n accordance wth Secton 8, below) n not less than the amounts and on the dates set forth n the followng payment schedule, to wt: (a) $343,500 on February, 968; on August, 968; and on each February st and August st thereafter untl maturty or untl ths fnancng s repad n full; sad payments to be appled frst on nterest and the balance on prncpal on each payment date. The Unversty agrees that t wll delver to Trustee the proceeds of the notes or bonds referred to n Secton 4(c) above, whch t ntends to sell on or before July 5, 969 and that otherwse t wll wth the assstance of the Trustee take approprate steps to assure that the Bonds are ready for delvery to the Bank on August, 969. SECTON 8 TRUSTEED PAYMENT TO BANK The Trustee agrees that all funds pad to t for payment to the Bank as provded n the precedng secton or elsewhere heren shall be held n trust and used solely to pay to the Bank the prncpay amount evdenced by the Note and nterest accrued thereon, whch payments shall be made n the amounts and on the due dates set forth n the Note and whch amounts shall be appled frst to.accrued nterest and then to prncpal. SECTON 9 UNVERSTY TO MANTAN AND OPERATE BRODY DORMTORY GROUP The Unversty agrees that t wll mantan and operate the Brody Dormtory Group as follows: (a) t wll keep same n operaton at all tmes, whle the Unversty s n regular sesson, except durng the summer sesson, when part or all of the same may be operated or closed n the dscreton of the Unversty subect to subparagraphs (b) and (c) hereof. (b) t wll at all such tmes charge and collect an amount for room, board and other servce charges from students and others usng same suffcent to produce Housng Net ncome, as defned n Secton 2 above, from same n the total estmated amount of \. $737,000 annually provded that n.no event shall such total amount be less than $687,000. The Unversty has estmated, on the bass of past experence, that sad room, board and other servce charges from the operaton of sad Brody Dormtory Group wll annually produce Housng Net ncome, as defned n Secton 2 above, n the amount of approxmately $737,000. (c) t wll, f necessary, to meet the payments to be made to the Bank heren provded for, adopt such reasonable rules, regulatons and requrements relatve to the use and occupancy of sad Brody Dormtory Group as shall be necessary to assure that the same wll be as fully used and occuped durng the entre year. (d) t wll, f more room shall be avalable n ts resdence halls than there are students who may be assgned to such resdence halls, frst assgn students to such resdence halls, ncludng sad Brody Dormtory Group, the revenues of whch are pledged to secure fnancngs, and such resdence halls, ncludng sad Brody Dormtory Group, shall be frst flled to the maxmum extent feasble and that all such student assgnments shall be made n a manner whch wll assure that the payments requred to be made on such outstandng fnancngs on sad resdence halls, ncludng sad Brody Dormtory Group, shall be met. SECTON 0 NSURANCE The Unversty covenants and agrees that t wll: (a) Pay the premum necessary to provde standard form fre and extended coverage nsurance on the Brody Dormtory Group n an amount to be determned by the Bank and the Trustee from tme to tme, whch shall be at least equal to the unpad balance of ths fnancng. r r

11 Fnance Commttee Meetng Mnutes, contnued July 2, Recommendaton by Mr. Cress for fnancng of dormtores, contnued F. Term for loans, and Offcal Resoluton, Holden Hall, contnued (b) Pay the premum necessary to provde standard form fre and extended coverage nsurance upon the contents of the Brody Dormtory Group n an amount to be determned by the Bank and the Trustee from tme to tme. (NOTE: The term "extended coverage as used n the precedng sub-paragraphs shall nclude coverage for loss from smoke, wndstorm hal, exploson and arcraft and vehcle damage). (c) Pay the premum necessary to provde publc lablty nsurance n lmts of not less than $00 000/$500,000 on the Brody Dormtory Group as well as rental value nsurance and/or use and occupancy nsurance on the same, the prncpal aggregate amount of whch shall not be less n any one year than the estmated revenue from the Brody Dormtory Group pledged hereunder for sad year. 587 Terms for {Fnancng and offcal Resolutons Holden Hall and Dormtory JNo. 7 Oakland [Unversty All nsurance shall be carred wth companes approved by the Trustee and the Bank. All polces of nsurance or certfcates evdencng the carryng of nsurance on the Brody Dormtory Group or any part thereof heren desgnated shall be deposted wth the Trustee and the Trustee shall have a frst len on all payments (except those under publc lablty nsurance) made on the same up to, but not to exceed the unpad balance! of the Note and the nterest thereon. n case of loss, the Trustee shall apply proceeds; of sad nsurance (except publc lablty) to the repar and restoraton of each unt \ and the contents thereof, wholly or partally destroyed, to ts former condton or n such other manner as wll make the Brody Dormtory Group usable or tenatable to the satsfacton of the Bank; provded, however, f n the udgment of the Bank, the funds receved from sad nsurance polces or otherwse shall be nsuffcent to make any unt of the Brody Dormtory Group or the entre Brody Dormtory Group usable or tenantable, then n that event the Trustee shall hold the funds pad to t by reason of such loss and such funds shall then be pad to the Bank and appled frst to accrued nterest and then to prncpal. SECTON AUDTS AND ACCOUNTS The Unversty agrees to furnsh to the Bank and the Trustee an annual report or audt report, wthn nnety (90) days after the end of each fscal year, showng n reasonable detal a complete record of the fnancal affars of the Unversty durng the precedng twelve (2) months perod and such reasonable specfc nformaton relatng to the Proect as the Bank or Trustee may reasonably request. Ths annual report or audt shall be certfed by an ndependent Certfed Publc Accountant selected by the Unversty wth the approval of the Trustee. The Unversty further agrees to permt the Bank or Trustee to examne at convenent tmes all of ts books and records relatng to the operaton of the Brody Dormtory Group or the collecton of the amounts for room, board, or other charges pledged n Secton 6 above.. SECTON 2 REPRESENTATONS AND WARRANTES The Unversty represents and warrants that: \ (a) Reports of the Unversty delvered to the Bank and the Trustee respectng the past ; record of ts enrollment, estmates of future enrollment and estmates heren as the proected revenues from the Brody Dormtory Group, ncludng student use thereof, farly represent the past experence of the Unversty and reflect ts best udgment as \ to the matters so estmated. Snce the submsson of such reports, there has been no \ materal adverse change n any of the partculars thereof, or factors relatng thereto. (b).no ltgaton or governmental proceedngs are pendng, or to the knowledge of the Unversty threatened aganst the Unversty whch could have a materal adverse effect on ths fnancng or the securty therefor. (c) ts prncpal place of busness s East Lansng, Mchgan. (d) () The presdng offcer at the meetng at whch ths Agreement was approved by -\ the Board nqured of the members of the Board whether any member of the Board was an offcer, drector, employee or stockholder of the Bank, the Trustee, or Unon Bank & Trust Co., Grand Rapds, Mch., Old Kent Bank & Trust Co., Grand Rapds, Mch., Cty Bank & Trust Co., Jackson, Mch., Genesee Merchants Bank & Trust Co., Flnt,.Mch., Ctzens Commercal & Savngs Bank, Flnt, Mch., Ann Arbor Bank, Ann Arbor, Mch., Second Natonal Bank of Sagnaw, Sagnaw, Mch., Bank of Commerce, Hamtramck, Mch. Chemcal Bank & Trust Co., Mdland, Mch., Peoples Natonal Bank & Trust Co. of Bay Cty, Mch., Frst Natonal Bank of Southwestern Mchgan, Nles, Mch. ; () Pror to the meetng of the Board, a drectve was crculated to all offcers of Mchgan State Unversty and ts employees who, n the case of the latter, are or wll be engaged n the wthn fnancng or Proect as an agent or representatve of the Board or Mchgan State Unversty or n any other way, nqurng whether any of such offcers and employees was a drector, employee (ncludng presdent, general manager or other smlar executve offcer) or stockholder, drectly or ndrectly of

12 5872 Fnance Commttee Meetng Mnutes, contnued July 2, 967 ;. Terms for ] Fnancng and (Offcal Resolutons Holden Hall c and Dormtory No. 7 Oakland Unversty Recommendaton by Mr. Cress for fnancng of dormtores, contnued F. Term for loans, and Offcal Resoluton, Holden Hall, contnued the Trustee or the Bank or any Bank named n () hereof or f he or she had a drect or ndrect nterest n the wthn fnancng. () No such member of the Board or offcer or such employee of Mchgan State Unversty dsclosed that he or she was a drector, employee (ncludng presdent, general manager or other smlar executve offcer) or stockholder, drectly or ndrectly, of ether the Trustee, the Bank or any of the banks named n () hereof or that he or she had drect or ndrect nterest n the wthn fnancng except: Norman C. Weston, John A. Hannah, Durward B. Varner, P. J. May and Jack Bresln. (v) Any and all such nterests n the Trustee, the Bank or any of the banks named n. () hereof whch were dsclosed by members of the Board or offcers or employees of Mchgan State Unversty were fully dsclosed to the Board pror to the approval of ths agreement, set forth n the record of the Board and. a copy thereof s ncluded as a part of the resoluton of the Board approvng the wthn fnancng. (e) t has estmated on the bass of past experence that the Brody Dormtory Group wll produce at least suffcent Housng Net ncome to meet the payment schedule set forth n Secton 7 above. SECTON 3 EVENTS OF DEFAULT f any one or more of the followng events heren called "Events of Default shall occur and be contnung, the prncpal amount of the Note and accrued nterest thereon shall become due and payable upon the demand of ether the Bank or the Trustee: (a) Default n the payment when due of nterest on, or the prncpal of, the Note. (b) Default n the observance or performance of any other part of the Agreement of the Unversty heren set forth, and the contnuance thereof for thrty (30) days after notce thereof to the Unversty from ether the Bank or the Trustee. (c) Any representatons or warrantes made by the Unversty heren, or any representaton or warranty made by the Unversty n any report, statement, schedule, or certfcate furnshed to the Bank or Trustee pursuant to ths Agreement, prove untrue n any materal respect. SECTON 4 REMEDY ON DEFAULT n case of any event of default as defned n Secton 3 the Trustee may, and on drecton of the Bank shall: (a) Proceed to enforce ts rghts and the rghts of the Bank ether by mandamus, specfc performance or any other sutable affrmatve remedy, to compel the Unversty to perform each and every covenant heren contaned, or by nuncton to prevent the Unversty from performng'any act n volaton of sad covenants. (b) Desgnate a recever to take charge of and manage sad Brody Dormtory Group and when the Trustee shall do so the Unversty agrees to appont eht person so desgnated as such recever wth all the power and authorty t can lawfully confer to control and regulate the operaton of sad Brody Dormtory Group, the uses to whch t may be put and to mpose and collect charges, fees and rents for the use thereof upon any users, ncludng the Unversty or any of ts faculty or students, to supplement or replace, as the case may be, charges for room and board to be charged each student therefor to the extent the Unversty has faled or fals to mantan and collect sad amounts and to pay same to the Trustee n accordance wth the provsons of ths Agreement. The Unversty agrees to comply wth and enforce all orders and requrements of such recever subect only to such reasonable rules and regulatons t must make for the general welfare of the students of Mchgan State Unversty. (c) Secure the appontment by a court of competent ursdcton of a recever to take charge of, mantan and operate sad Brody Dormtory Group and to mantan and collect board charges, fees and rents therefor under the ursdcton of the court. Such rghts and remedes shall be cumulatve and any two or more thereof may be exercsed by the Trustee successvely from tme to tme and any falure on the part of the Trustee to act shall not consttute a waver of any rght or remedy whch the Trustee or the Bank may possess hereunder. The Unversty expressly authorzes the Trustee to brng any of the actons at law or n equty herenbefore mentoned and hereby waves any mmunty to be proceeded aganst as heren authorzed whch may exst by reason of ts beng a subdvson of the State government.