40:37C-9 - Security for principal, interest and premiums - New Jersey Statutes

40:37C-9.  Security for principal, interest and premiums
    The principal of and interest and premiums, if any, on any bonds issued by an authority shall be secured by a mortgage or pledge of the revenues and receipts out of which the same shall be made payable and may be secured by the pledge of all or any part of the assets of such authority, subject to such agreements with bondholders as may then prevail, or such bonds of the authority  may be secured by loan and security agreements or any other instrument upon  terms and conditions as the authority shall deem reasonable, including  provision for the establishment and maintenance of reserve and insurance funds;   provided that any such agreement or instrument shall provide for payments at  least adequate to pay the principal of and interest and premiums, if any, on  bonds issued to finance pollution control facilities as they become due and  payable.  The resolution under which the bonds are authorized to be issued may  contain any agreements and provisions respecting the maintenance of the  properties covered thereby;  the fixing, collection and use of rents for any  portions thereof leased by the authority to others; the determination,  collection and application of payments to be received for the sale of any  properties covered thereby;  the creation and maintenance of special funds from  such revenues or receipts and the limitations on the purpose to which the proceeds from the sale of the bonds may be applied and pledging such proceeds  to secure the payment of the bonds;  the limitations on the issuance of additional bonds and on the refunding of outstanding or other bonds;  the  procedure, if any, by which the terms of any such agreement may be amended or  abrogated;  and the rights and remedies available in the event of default,  including the designation of a trustee, all as the authority shall deem  advisable and not in conflict with the provisions hereof.  Each pledge and  agreement made for the benefit or security of any of the bonds of the authority  shall continue effective until the principal of and interest and premiums, if  any, on the bonds for the benefit of which the same were made shall have been  fully paid or provision for such payment duly made.  In the event of default in  such payment or in any agreement of the authority made as a part of the  contract under which the bonds were issued, whether contained in the  proceedings authorizing the bonds or in any indenture executed as security  therefor, said payment or agreement may be enforced by suit, action in lieu of  prerogative writ, or the appointment of a receiver in equity, or any one or  more of said remedies.

    As further security for the bonds, an authority may enter into contracts of  insurance assuring that the principal of and interest on such bonds will be  paid and that rental payments, installment payments or other payments to be  made by the user of the facilities will be made;  provided, however, that the  authority shall not be obligated under the terms of such policy to any greater  extent than allowed by the provisions of this act.  The cost of any such  insurance contract may be paid out of the proceeds of the sale of the bonds so  insured.

     L.1973, c. 376, s. 9, eff. Jan. 9, 1974.  Amended by L.1983, c. 298, s. 8, eff. Aug. 8, 1983.