90-5-105. Provisions for security of bondholders.
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/mt/title-90/chapter-5/part-1/90-5-105·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
90-5-105 . Provisions for security of bondholders.
(1)The payment of the principal of and interest on any bonds issued under the authority of this part shall be secured by a pledge of the revenues out of which such bonds shall be 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 project;
(b)a pledge of the lease or loan agreement relating to such project; or
(c)such other security device as may be deemed most advantageous by the issuing authority.
(a)The proceedings under which the bonds are authorized to be issued under the provisions of this part and any mortgage given to secure the same, including a mortgage given by the borrower or lessee, may contain any agreements and provisions customarily contained in instruments securing bonds, all as the governing body shall deem advisable and as shall not be in conflict with the provisions of this part, including, without limiting the generality of the foregoing, provisions respecting the:
(i)fixing and collection of rents or payments under any lease or loan agreement concerning the project covered by such proceedings or mortgage;
(ii)terms to be incorporated in the lease or loan agreement;
(iii)maintenance and insurance of such project;
(iv)creation and maintenance of special funds from the revenues of such project; and
(v)rights and remedies available in the event of a default to the bondholders or to the trustee under a mortgage.
(b)In making any such agreements or provisions, a municipality or county shall not have the power to obligate itself except with respect to the project and the application of the revenues therefrom and shall not have the power to incur a pecuniary liability or a charge upon its general credit or against its taxing powers.
(4)The proceedings authorizing any bonds under the provisions of this part and any mortgage, including a mortgage given by the lessee or borrower, securing such bonds may provide that in the event of a default in the payment of the principal of or the interest on such bonds or in the performance of any agreement contained in such proceedings or mortgage, such 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 revenues from the project in accordance with such proceedings or the provisions of such mortgage.
(5)Any mortgage made by the municipality or county or by the lessee or borrower to secure these bonds may also provide that, in the event of a default in the payment thereof 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 now or hereafter permitted by law. Such mortgage may also provide that any trustee under such mortgage or the holder of any of the bonds secured thereby may become the purchaser at any foreclosure sale if the highest bidder therefor. No breach of any such agreement shall impose any pecuniary liability upon a municipality or county or any charge upon their general credit or against their taxing powers.