§ 45-33.2-7 - Security for bonds – Trust agreements.
SECTION 45-33.2-7
§ 45-33.2-7 Security for bonds –Trust agreements. – (a) In the discretion of the officers authorized to sell the bonds, but subjectto the provisions of the vote authorizing the bonds, bonds issued under thischapter may be secured by one or more trust agreements between the city or townand a corporate trustee or trustees, which may be any trust company or bankhaving the powers of a trust company within or without the state. A trustagreement under this section shall be in a form and executed in a manner thatmay be determined by the officers. A trust agreement may pledge or assignproject revenues, in whole or in part. It may contain provisions for protectingand enforcing the rights, security, and remedies of the bondholders as may bereasonable and proper and not in violation of law, including without limitingthe generality of the preceding, provisions defining defaults and providing forremedies in the event of defaults, which may include the acceleration ofmaturities, and covenants stating duties of, and limitations on, the city ortown in relation to carrying out and otherwise administering the project orprojects, the custody, safeguarding, investment and application of projectrevenues, the issue of additional bonds under this chapter, the determinationof tax increments, the fixing of fees and charges, if any, in relation to theproject or projects, the collection of project revenues, the use of any surplusbond proceeds, the establishment of reserves, and the replacement of bonds orcoupons which become mutilated or are destroyed or lost. Subject to theprovisions of this chapter, moneys subject to the trust agreement shall beheld, invested, and applied as provided in the trust agreement; provided, thatmoneys not deposited in trust with a corporate trustee shall be in the custodyof the city or town treasurer.
(b) It is lawful for any bank or trust company to act as adepository or trustee of the proceeds of bonds or of other moneys under anytrust agreement and to furnish indemnifying bonds or to pledge securities thatmay be required by the trust agreement. The trust agreement or resolution mayestablish the rights and remedies of the bondholders and the trustee, and mayrestrict the individual right of action by bondholders. All expenses incurredin carrying out the provisions of the trust agreement or resolution may betreated as current operating expenses.