§ 159D-12. Security documents. - North Carolina Statutes

§ 159D‑12. Security documents.

(a)        Bonds issued under the provisions of this Article may besecured by a security document which may be a trust instrument between theagency and a bank or trust company or individual within the State, or a bank ora trust company without the State, as trustee. Such security document maypledge and assign the revenues provided for the security of the bonds,including proceeds from the sale of any project, or part thereof, insuranceproceeds and condemnation awards, and may convey or mortgage the project andother property to secure a bond issue.

The revenues and other funds derived from the project, except any partnecessary to provide reserves shall be set aside at such regular intervals asmay be provided in such security document in a sinking fund which may bepledged to, and charged with, the payment of the principal of and the intereston such bonds as they become due and the redemption price or the purchase priceof bonds retired by call or purchase as therein provided. Such pledge shall bevalid and binding from the time when the pledge is made. The revenues sopledged and thereafter received by the agency shall immediately be subject tothe lien of such pledge without any physical delivery thereof or further act,and the lien of any such pledge shall be valid and binding as against allparties having claims of any kind in tort, contract or otherwise against theagency, 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.

(b)        It is lawful for any bank or trust company incorporatedunder the laws of this State which may act as depositary of the proceeds ofbonds, revenues or other funds provided under this Article to furnish suchindemnifying bonds or to pledge such securities as may be required by theagency. 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 agency may subordinate the bonds or its rights under the financingagreement or otherwise to any prior, contemporaneous or future securities orobligations or lien, mortgage or other security interest.

Any such security document may contain such additional provisions as inthe determination of the agency are necessary or convenient or effectuate thepurposes of this Article. (1977, 2nd Sess., c. 1198, s. 1; 2000‑179, s. 2.)