Section 5408 - Pledges and covenants; trust agreementIn the discretion of the municipal officers of any municipality, any issue of revenue bonds may be secured by a trust agreement by and between the municipality and a corporate trustee, which may be any trust company within or outside the State. All expenses incurred in carrying out the resolution or trust agreement may be treated as a part of the cost of operation. [1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).]
1.Pledge of revenues; conveyance or mortgage prohibited. The resolution authorizing the issuance of the bonds or the trust agreement may pledge the revenues to be received from the revenue-producing municipal facility, including that portion of the revenue-producing municipal facility financed with revenue bonds issued under this chapter, but may not convey or mortgage any revenue-producing municipal facility or a portion of a revenue-producing municipal facility financed with revenue bonds issued under this chapter. All pledges of revenue under this chapter are valid and binding from the time when the pledge is made. All revenues received by a municipality after being pledged are immediately subject to the lien of those pledges without any physical delivery thereof or further action under the Uniform Commercial Code or otherwise. The lien of these pledges is valid and binding against all parties having claims of any kind in tort, contract or otherwise against the municipality, whether or not those parties have notice of the lien. [1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).]
2.Rights and remedies of bondholders. The resolution may also contain any provisions for protecting and enforcing the rights and remedies of the bondholders that are reasonable and proper and not in violation of law, including covenants setting forth the duties of the municipality and the municipal officers in relation to: A. The acquisition, construction, reconstruction, improvement, repair, maintenance, operation and insurance of any revenue-producing municipal facility or related system or systems; [1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).]B. The fixing and revising of rates, fees and charges; [1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).]C. The custody, safeguarding and application of all money; and [1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).]D. The employment of consulting engineers in connection with the acquisition, construction, reconstruction or operation. [1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).] The resolution or trust agreement may contain any other provisions that the municipal officers consider reasonable and proper for the security of the bondholders. The resolution or trust agreement may set forth the rights and remedies of the bondholder and of the trustee, if any, and may restrict the individual right of action by bondholders as is customary in trust agreements or trust indentures securing bonds or debentures of corporations.
[1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).]
3.Payment of proceeds and revenues. Except as provided otherwise in this chapter, the municipal officers may provide: A. For the payment of the proceeds of the sale of the bonds and the revenues of any revenue-producing municipal facility or part of any revenue-producing municipal facility to any officer, board or depositary that they designate for the custody of the proceeds and revenues; and [1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).]B. For the method of disbursement of the proceeds and revenues, with any safeguards and restrictions that they determine. [1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).] [1987, c. 737, Pt. A, §2(NEW); 1987, c. 737, Pt. C, §106(NEW); 1989, c. 6(AMD); 1989, c. 9, §2(AMD); 1989, c. 104, Pt. C, §§8, 10(AMD).]
1987, c. 737, §§A2,C106 (NEW) . 1989, c. 6, (AMD) . 1989, c. 9, § 2 (AMD) . 1989, c. 104, §§C8,10 (AMD) .