90-7-304. Security of bondholders.
90-7-304. Security of bondholders. (1) The payment of the principal of and interest on any bonds issued under this chapter must be secured by a pledge of the revenue out of which the bonds are made payable.
(2) The principal of and interest on any bonds issued under the authority of this part may be secured by:
(a) a mortgage covering all or any part of the property of the participating institution;
(b) a pledge of the lease or loan agreement relating to the eligible facility; or
(c) another security device that is considered most advantageous by the authority.
(3) The proceedings under which the bonds are authorized to be issued under the provisions of this chapter and any mortgage given to secure the bonds, including a mortgage given by the borrower or lessee, may contain any agreements and provisions customarily contained in instruments securing bonds, as the authority considers advisable. The provisions may not be in conflict with the provisions of this chapter, including without limitation provisions relating to:
(a) fixing and collection of rents or payments under any lease or loan agreement concerning the eligible facility covered by the proceedings or mortgage;
(b) terms to be incorporated in the lease or loan agreement;
(c) maintenance and insurance of the eligible facility;
(d) creation and maintenance of special funds from the revenue of the eligible facility; and
(e) rights and remedies available in the event of a default to the bondholders or to the trustee under a mortgage.
(4) The proceedings authorizing any bonds under the provisions of this chapter and any mortgage, including a mortgage given by the lessee or borrower, securing bonds may provide that in the event of a default in the payment of the principal of or the interest on the bonds or in the performance of any agreement contained in the proceedings or mortgage, the payment and performance may be enforced by mandamus or by the appointment of a receiver in equity with power to charge and collect rents and to apply the revenue from the project in accordance with the proceedings or the provisions of the mortgage.
(5) Any mortgage made by the authority, lessee, or borrower to secure these bonds may provide that, in the event of a default in the payment of the bonds or the violation of any agreement contained in the mortgage, the mortgage may be foreclosed and the project sold under proceedings in equity or in any other manner permitted by law. The mortgage may also provide that any trustee under the mortgage or the holder of any of the bonds secured by the mortgage may become the purchaser at any foreclosure sale if the trustee is the highest bidder. A breach of an agreement may not impose any pecuniary liability upon the authority.
History: En. Sec. 14, Ch. 703, L. 1983; amd. Sec. 11, Ch. 477, L. 1997; amd. Sec. 17, Ch. 137, L. 2001.