§ 159I-16. Trust agreement or resolution.
§ 159I‑16. Trustagreement or resolution.
(a) In the discretion of the Agency, any bonds and notes issuedunder the provisions of this Chapter may be secured by a trust agreement by andbetween the Agency and a corporate trustee or by a resolution providing for theappointment of a corporate trustee. The corporate trustee may be, in eithercase, any trust company or bank having the powers of a trust company within orwithout the State. Such trust agreement or resolution may pledge or assign allor part of the revenues or assets of the Agency, including, without limitation,loan agreements, agreements or commitments to enter into loan agreements,contracts, agreements and other security or investment obligations, any fees orcharges made or received by the Agency, the moneys received in payment of loansand interest thereon, and any other moneys received by the Agency. The trustagreement or resolution may contain such provisions for protecting andenforcing the rights and remedies of the owners of any bonds or notes issuedthereunder as may be reasonable and proper and not in violation of law,including covenants setting forth the duties of the Agency in respect of thepurposes to which bond or note proceeds may be applied, the disposition andapplication of the revenues or assets of the Agency, the duties of the Agencywith respect to the acquisition and disposition of any project and thepurchase, acceptance and disposition of any loan agreement, the charges andcollection of any revenues and administrative charges, the terms and conditionsfor the issuance of additional bonds and notes, and the custody, safeguarding,investment, and application of all moneys. All bonds and notes issued underthis Chapter shall be equally and ratably secured by a pledge, charge, and lienupon the revenues or assets provided in such trust agreement or resolution,without priority by reason of number, or dates of bonds or notes, execution, ordelivery, in accordance with the provision of this Chapter and of such trustagreement or resolution; except that the Agency may provide in such trustagreement or resolution that bonds or notes issued pursuant thereto shall, tothe extent and in the manner prescribed in such trust agreement or resolution,be subordinated and junior in standing, with respect to the payment ofprincipal and interest and to the security thereof, to any other bonds ornotes. It shall be lawful for any bank or trust company that may act asdepositary of the proceeds of bonds or notes, revenues, assets, or other moneyhereunder to furnish such indemnifying bonds or to pledge such securities asmay be required by the Agency. Any trust agreement or resolution may set outthe rights and remedies of the owners of any bonds or notes and of any trustee,and may restrict the individual rights of action by any such owners. Inaddition to the foregoing, any trust agreement or resolution may contain suchother provisions as the Agency may deem reasonable and proper for the securityof the owners of any bonds or notes. Expenses incurred in carrying out theprovisions of any trust agreement or resolution may be treated as a part of thecost of any project or as an administrative charge and may be paid from therevenues or assets pledged or assigned to the payment of the principal of andthe interest on bonds and notes or from any other funds available to theAgency.
(b) The Agency may set the terms and conditions of loanagreements, including, without limitation, the repayment terms, so as toprovide a fund sufficient, with such other funds as may be made availabletherefor, including, without limitation, investment income and the proceeds ofadministrative charges to the extent determined by the Agency:
(1) To pay the costs of operation of the Agency,
(2) To pay the principal of and the interest on all bonds andnotes as the same shall become due and payable, and
(3) To create and maintain any reserves provided for in thetrust agreement or resolution securing such bonds or notes.
(c) All pledges of any assets or revenues of the Agency asauthorized by this chapter shall be valid and binding from the time when suchpledges are made. All such assets or revenues so pledged and thereafterreceived by the Agency shall immediately be subject to the lien of such pledgewithout any physical delivery thereof or further act, and the lien of any suchpledge shall be valid and binding as against all parties having claims of anykind in tort, contract, or otherwise against the Agency, irrespective ofwhether such parties have notice thereof. The trust agreement or resolution bywhich a pledge is created or any loan obligation need not be filed or recordedexcept in the records of the Agency.
(d) The State does pledge to and agree with the holders of anybonds or notes issued by the Agency that so long as any of such bonds or notesare outstanding and unpaid the State will not limit or alter the rights vestedin the Agency at the time of issuance of the bonds or notes to set the termsand conditions of loan agreements in connection with which the bonds or noteswere issued, so as to provide a fund sufficient, with such other funds as maybe made available therefor, including without limitation, investment income andthe proceeds of administrative charges to the extent determined by the Agency,to pay the costs of operation of the Agency, to pay the principal of and theinterest on all bonds and notes as the same shall become due and payable, andto create and maintain any reserves provided therefor, and to fulfill the termsof any agreements made with the bondholders or noteholders. The State shall inno way impair the rights and remedies of the bondholders or noteholders untilthe bonds or notes and all costs and expenses in connection with any action orproceedings by or on behalf of the bondholders or noteholders, are fully paid,met, and discharged. (1989, c. 756, s. 1; 1989 (Reg. Sess., 1990), c. 1004, ss. 24, 25, c.1024, s. 38(c), (d).)