 | Board of Visitors minutes February 9, 2007 |  |
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 Events of Default.
Each of the following events is hereby declared to be an "Event of Default" under this Resolution:
(a) due and punctual payment of the principal, purchase price or redemption premium, if any, of any of the Notes is not made when the same become due and payable, either at maturity or by proceedings for redemption or otherwise;
(b) due and punctual payment of any interest on any of the Notes is not made when the same become due and payable;
(c) the University, for any reason, is rendered incapable of fulfilling its obligations hereunder;
(d) an order or decree is entered, with the consent or acquiescence of the University, appointing a receiver or receivers of the University or any part thereof or of the revenues thereof, or if such order or decree, having been entered without the consent or acquiescence of the University, is not vacated or discharged or stayed on appeal within sixty (60) days after the entry thereof;
(e) any proceeding is instituted, with the consent or acquiescence of the University, for the purpose of effecting a composition between the University and its creditors or for the purpose of adjusting the claims of such creditors pursuant to any federal or state statute now or hereafter enacted; or
(f) the University defaults in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Notes or in this Resolution on the part of the University to be performed, and such default continues for thirty (30) days after written notice specifying such default and requiring same to be remedied is given to the Board by any Noteholder, provided that if such default is such that it can be corrected but cannot be corrected within such thirty (30) day period, it shall not constitute an Event of Default if corrective action is instituted by the University within such period and is diligently pursued until the default is corrected.
Section 7.2 Remedies.
(a) Upon the happening and continuance of an Event of Default hereunder, the holders of not less than 25% in aggregate principal amount of the Notes, by instrument or instruments filed with the University and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the holders of the Notes for the purposes herein and in the Act provided, which trustee may be the State Treasurer and shall be the same trustee so appointed with respect to all other outstanding Parity Credit Obligations. Such trustee may, and upon written request of the holders of not less than 25% in principal amount of the Notes then outstanding shall, in its own name:
- (1) By mandamus or other suit, action or proceeding at law or in equity enforce all rights of the holders of the Notes, including the right to require the University and its Board to collect fees, rents, charges or other revenues adequate to carry out an agreement as to, or pledge of, such revenues, and to require the University and Board to carry out any other agreements with the holders of the Notes and to perform it and their duties under the Act;
- (2) Bring suit upon the Notes;
- (3) By action or suit in equity, require the University to account as if it were the trustee of an express trust for the holders of the Notes; or
- (4) By action or suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of the Notes.
(b) Any such trustee, whether or not all such Notes have been declared due and payable, shall be entitled as of right to the appointment of a receiver who may enter and take possession of any property of the University any of the revenues from which are pledged for the
Such trustee shall, in addition to the foregoing, have and process all of the powers necessary or appropriate for the exercise of any functions specifically set forth herein or incident to the general representation of the holders of the Notes in the enforcement and protection of their rights.
(c) To the extent permitted by law, upon the happening and continuance of any Event of Default, then and in every such case any Noteholder may proceed, subject to the provisions of Section 7.5, to protect and enforce the rights of the Noteholders by a suit, action or special proceeding in equity or at law, either for the specific performance of any covenant or agreement contained herein or in aid or execution of any power herein granted or for the enforcement of any proper legal or equitable remedy as such Noteholder shall deem most effectual to protect and enforce such rights.
Section 7.3 Pro Rata Application of Funds.
Anything in this Resolution to the contrary notwithstanding, if at any time the moneys available in the Debt Service Fund shall not be sufficient to pay the interest on or the principal of the Notes as the same shall become due and payable, such moneys, together with any moneys then available or thereafter becoming available for such purpose, whether through the exercise of the remedies provided for in this Article or otherwise, shall be applied as follows:
(a) If the principal of all the Notes shall not have become due and payable, all such moneys shall be applied:
- first: to the payment to the persons thereto of all installments of interest then due and payable in the order in which such installments became due and payable and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment, ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in the Notes; and
- second: to the payment to the persons
entitled thereto of the unpaid principal of any of
the Notes which shall have become due and payable
(other than Notes called for redemption for the
payment of which moneys are held pursuant to the
provisions of this Resolution), in the order of
their due dates, with interest on the principal
amount of such Notes at the respective rates
specified therein from the respective dates upon
which such Notes became due and payable, and, if the
amount available shall not be sufficient to pay in
full the principal of the Notes due and payable on
any particular date, together with such interest,
then to the payment first of such interest, ratably,
according to the amount of such interest due on such
date, and then to the payment of such principal, ratably, according to the amount of such principal due on such date, to the persons entitled thereto without any discrimination or preference.-31-
(b) If the principal of all the Notes shall have become due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid on the Notes, without preference or priority of principal over interest or interest over principal, or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably, according to the amounts due, respectively, for principal and interest, to the persons entitled thereto, without any discrimination or preference.
Whenever moneys are to be applied by the trustee pursuant to the provisions of this Section, such moneys shall be applied by the trustee at such times, and from time to time, as the trustee in his or her sole discretion shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future; the deposit of such moneys with any Issuing and Paying Agent, or otherwise setting aside such moneys, in trust for the proper purpose shall constitute proper application by the trustee; and the trustee shall incur no liability whatsoever to the Board, to any Noteholder or to any other person for any delay in applying any such moneys, so long as the trustee acts with reasonable diligence, having due regard to the circumstances, and ultimately applies the same in accordance with such provisions of this Resolution as may be applicable at the time of application by the trustee. Whenever the trustee shall exercise such discretion in applying such moneys, he or she shall fix the date (which shall be an interest payment date unless the trustee shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The trustee shall give such notice (or shall cause the Issuing and Paying Agent to give such notice) as he or she may deem appropriate of the fixing of any such date and shall not be required to make payment to the holder of any Note until such Note shall be surrendered to the trustee or any Issuing and Paying Agent for appropriate endorsement, or for cancellation if fully paid.
Notwithstanding anything in this Resolution to the contrary, this Section 7.3 shall be interpreted so that term "Notes" or "Bonds" shall include the Notes and any Parity Credit Obligations. In each resolution authorizing the issuance of any Parity Credit Obligation, the University agrees to provide for the trustee thereunder to be the same as the trustee under this Resolution, and further agrees to include provisions substantially identical to those contained in this Section 7.3.
Section 7.4 Effect of Discontinuance of Proceedings.
In case any proceeding taken by any Noteholder on account of any Event of Default shall have been discontinued or abandoned for any reason, then and in every such case the University and the Noteholders shall be restored to their former positions and rights hereunder, respectively, and all rights and remedies of the Noteholders shall continue as though no such proceeding had been taken.
Section 7.5 Proceedings for Equal Benefit of All Noteholders.
No Noteholder shall have any right in any manner whatever to affect, disturb or prejudice the security of this Resolution or to enforce any right hereunder, except in the manner herein provided, and all
Section 7.6 No Remedy Exclusive.
No remedy herein conferred on the Noteholders is intended to be exclusive of any other remedy or remedies, and each and every remedy conferred shall be cumulative and shall be in addition to every other remedy given hereunder and under the Act or now or hereafter existing at law or in equity or by statute.
Section 7.7 No Delay or Omission Construed to Be a Waiver.
No delay or omission of any Noteholder to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and every power and remedy given by this Article to the Noteholders may be exercised from time to time and as often as may be deemed expedient.
| Board of Visitors minutes February 9, 2007 | |