§ 63A-14. Security documents. - North Carolina Statutes

§63A‑14.  Security documents.

Bonds issued under theprovisions of this Chapter may be secured by a security document which may be atrust instrument between the Authority and a bank or trust company orindividual within the State, or a bank or a trust company outside the State, astrustee.  The security document may pledge and assign the revenues provided forthe security of the bonds, including proceeds from the sale of any project, orpart thereof, insurance proceeds and condemnation awards, and may convey ormortgage the project and other property to secure a bond issue.

The revenues and other fundsderived from the project, except for any part as may be necessary to providereserves therefor, if any, may be set aside at regular intervals as may be providedin the security document in a sinking fund which may be pledged to, and chargedwith, the payment of the principal of and the interest on the bonds as the sameshall become due and the redemption price or the purchase price of bondsretired by call or purchase as provided.  The pledge shall be valid and bindingfrom the time when the pledge is made.  The revenues pledged and received bythe Authority shall immediately be subject to the lien of the pledge withoutany physical delivery or further act, and the lien of any pledge shall be validand binding as against all parties having claims of any kind in tort, contractor otherwise against the Authority, irrespective of whether the parties havenotice.  The use and disposition of money to the credit of the sinking fundshall be subject to the provisions of the security document.  The securitydocument may contain provisions for protecting and enforcing the rights andremedies of the bondholders as may be reasonable and proper and not inviolation of law, including, without limitation, any one or more of thefollowing:

(1)        Acceleration of allamounts payable under the security document.

(2)        Appointment of areceiver to manage the project and any other property mortgaged or assigned assecurity for the bonds.

(3)        Foreclosure and saleof the project and any other property mortgaged or assigned as security for thebonds.

(4)        Rights to bring andmaintain such other actions at law or in equity as may appear necessary ordesirable to collect the amounts payable under, or to enforce the covenantsmade in, the security document.

It shall be lawful for anybank or trust company incorporated under the laws of this State which may actas depository of the proceeds of bonds, revenues, or other funds provided underthis Chapter to furnish indemnifying bonds or to pledge securities as may berequired by the Authority.  All expenses incurred in carrying out theprovisions of the security document may be treated as a part of the cost of theproject in connection with which bonds are issued or as an expense ofadministration of the project.

The Authority may subordinatethe bonds or its rights under the security document or otherwise to any prior,contemporaneous, or future securities or obligations or lien, mortgage, orother security interest.  (1991, c. 749, s. 1.)