56

50

(b) Boiler Insurance. Upon acceptance of the Project from the contractor,
the Borrower shall, if such insurance is not already in force, procure and
maintain, so long as any of the Bonds are outstanding, Boiler Insurance
covering any steam boilers servicing the Project, in a minimum amount of
$50,000.00.

(c) Liability Insurance. Upon receipt of any funds acquired pursuant to the
Loan Agreement, the borrower shall, if such insurance is not already in
force, procure and maintain, so long as any of the Bonds are outstanding,
Public Liability Insurance with limits of not less than $100,000 for one
person and $300,000 for more than one person involved in one accident to
protect the borrower from claims for bodily injury and/or death which may
arise from the borrower's operations, including any use or occupancy of its
grounds, structures and vehicles, and including any non-owned vehicles
operated for the benefit of the borrower. The borrower shall also maintain
Vehicle Property Damage Insurance with limits of not less than $10,000.

(d) Use and Occupancy Insurance. Immediately upon occupancy of any portion
the Project and so long thereafter as the funds and investments of the Bond
and Interest Sinking Fund Account or Collateral Account, if any (as provided
in the Loan Agreement) are less than the maximum debt service reserve
required by said provisions of the Loan Agreement, the Borrower shall pro-
cure and maintain Use and Occupancy Insurance on each building, the revenues
of which are pledged to payment of the Bonds, in an amount sufficient to enable
the Borrower to deposit in the Bond and Interest Sinking Fund Account, out of
the proceeds of such insurance an amount equal to the sum that would normally
have been available for deposit in such Account from the revenues of the
damaged building during the time the damaged building is non-revenue produc-
ing as a result of loss of use caused by the perils covered by Dire and Extended
Coverage Insurance. Where a Trustee is to be or has been designed in
connection with the Bonds, each such insurance policy shall be acceptable to
the Trustee, and shall contain a loss payable clause making any loss there-
under payable to the Trustee as its interest may appear.

Section 34. Parietal Rules. The Borrower shall establish and maintain so
long as any of the Bonds are outstanding, such parietal rules, rental rates
and charges for the use of the Project facilities and such other facilities the
revenues of which are pledged to the payment of the Bonds as may be neces-
sary to (1) assure maximum occupancy and use of said facilities and (2)
provide together with any other funds herein pledged to the payment of the
Bonds (a) the operating and maintenance expenses of said facilities, (b) the
debt service on the Bonds, (c) the required reserve thereof, and (d) the
Repair and Replacement Reserve where such reserves are required.

Section 35. Proper Records and Books. The Borrower covenants that it will
keep accurate financial records and proper books relating to the Project, other
facilities the revenues of which are pledged to secure the Bonds, and other
pledged revenue sources, and such records and books shall be open to
inspection by the Bondholders and their agents and representatives. The
Borrower further covenants that not later than 90 days after the close of each
fiscal year it will furnish to the Trustee and to any Bondholder who shall
request same in writing, copies of audit reports prepared by an independent
public accountant, or where appropriate, by the State auditing official, reflect-
ing in reasonable detail the financial condition and record of operation of the
Borrower, the Project, other pledged facilities, and other pledged revenue
sources, including particularly the Borrower's enrollment, the occupancy or
degree of use of and rates charged for the use of, and the insurance on, the
Project and any other facilities the revenues of which are pledged in the Loan
Agreement, and the status of the several accounts and funds required by the
Loan Agreement.

Section 36. Investment of Funds. Moneys on deposit to the credit of the Bond
and Interest Sinking Fund Account and/or the Repair and Replacement Reserve
Account shall, upon request by the Borrower, be invested by the Trustee or
other designated depository, in direct obligations of, or obligations the
principal of and the interest on which are guaranteed by, the United States
Government. Where the Borrower is required to maintain fixed amounts in
such accounts, the investments of such funds shall be valued in terms of
current market value as of June 30 and December 31 of each year.

Section 37. Bond Redemption. So long as the Government holds any of the
Bonds, it will waive the non-callable provisions, redemption premiums, and
publication of notice of call applicable thereto.