State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_159C > GS_159C-12

§ 159C‑12. Security documents.

Bonds issued under the provisions of this Chapter may be secured by asecurity document which may be a trust instrument between the authority and abank or trust company or individual within the State, or a bank or a trust companywithout the State, as trustee. Such security document may pledge and assign therevenues provided for the security of the bonds, including proceeds from thesale of any project, or part thereof, insurance proceeds and condemnationawards, and may convey or mortgage the project and other property to secure abond issue.

The revenues and other funds derived from the project, except such part thereof as may be necessary to provide reserves therefor, if any, shall beset aside at such regular intervals as may be provided in such securitydocument in a sinking fund which may be thereby pledged to, and charged with,the payment of the principal of and the interest on such bonds as the sameshall become due and the redemption price or the purchase price of bondsretired by call or purchase as therein provided. Such pledge shall be valid andbinding from the time when the pledge is made. The revenues so pledged andthereafter received by the authority shall immediately be subject to the lienof such pledge  without any physical delivery thereof or further act, and thelien of  any such pledge shall be valid and binding as against all partieshaving claims of any kind in tort, contract or otherwise against the authority,irrespective of whether such parties have notice thereof. The use anddisposition of money to the credit of such sinking fund shall be subject to theprovisions of the security document. Such security document may contain suchprovisions for protecting and enforcing the rights and remedies of thebondholders as may be reasonable and proper and not in violation of law,including, without limitation, any one or more of the following:

(1)        Acceleration of all amounts payable under the securitydocument;

(2)        Appointment of a receiver to manage the project and anyother property mortgaged or assigned as security for the bonds;

(3)        Foreclosure and sale of the project and any other propertymortgaged or assigned as security for the bonds; and

(4)        Rights to bring and maintain such other actions at law or inequity as may appear necessary or desirable to collect the amounts payableunder, or to enforce the covenants made in, the security document.

It shall be lawful for any bank or trust company incorporated under thelaws of this State which may act as depositary of the proceeds of bonds,revenues or other funds provided under this Chapter to furnish suchindemnifying bonds or to pledge such securities as may be required by theauthority. All expenses incurred in carrying out the provisions of such securitydocument may be treated as a part of the cost of the project in connection withwhich bonds are issued or as an expense of administration of such project.

The authority may subordinate the bonds or its rights under thefinancing agreement or otherwise to any prior, contemporaneous or futuresecurities or obligations or lien, mortgage or other security interest. (1975, c. 800, s. 1; 1977, c. 719, s. 4; 1979, c. 109,s. 1.)