(1) (a) The principal and interest on any bonds or notes issued by the authority may be secured by a trust indenture by and between the authority and a corporate trustee. Such trust indenture or the resolution providing for the issuance of such obligations may pledge or assign all or any part of the revenues or assets of the authority, including, without limitation, student obligations, student obligation commitments, institutional loans, moneys deposited or pledged by or on behalf of one or more institutions of higher education, moneys deposited or pledged by the division, temporary loans, contracts, agreements, and other security or investment obligations, the fees or charges made or received by the authority, the moneys received in payment of student obligations and institutional loans and interest on such moneys, including the proceeds of insurance on such obligations and loans and any other moneys received or due to be received by the authority.
Such trust indenture or resolution may contain such provisions for protecting andenforcing the rights and remedies of the holders of any of the bonds or notes as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the authority in relation to the purposes to which proceeds of the bonds or notes may be applied, the disposition or pledging of the revenues or assets of the authority, the terms and conditions for the issuance of additional bonds or notes, and the custody, safeguarding and application of all moneys. Any such trust indenture or resolution may set forth the rights and remedies of the holders of any bonds or notes and of the trustee and may restrict the individual right of action by any such holders.
In addition, any such trust indenture or resolution may contain such other provisionas the authority may deem reasonable and proper for the security of the holders of any bonds or notes, including but not limited to provisions for insurance, letters of credit, standby credit agreements, take-out commitments, or other forms of credit insuring against default or guaranteeing timely payment with respect to student obligations, institutional loans, or bonds. All expenses incurred in carrying out the provisions of such indenture or resolution may be paid from the revenues or assets pledged or assigned to the payment of the principal of and the interest on bonds or notes or from any other funds available to the authority.
(2) (a) Any pledge made by the authority, by one or more institutions of higher education, by a nonprofit corporation acting on behalf of one or more institutions of higher education, or by the division shall be valid and binding from the time when the pledge is made. The revenues and moneys so pledged and thereafter received by or otherwise credited to such pledging parties shall immediately be subject to lien of such pledge without any physical delivery, filing, or further act, and the lien of such pledge shall have priority over any and all other obligations and liabilities of such pledging parties, subject to any contractual covenants by the pledging parties and any prior pledges and liens, and shall be valid, binding, and enforceable against all parties having claims of any kind in tort, contract, or otherwise against such pledging parties, irrespective of whether such claiming parties have notice of such lien. Neither the resolution nor any other instrument by which a pledge is created need be recorded. Each pledge, agreement, and indenture made for the benefit or security of any of the bonds of the authority shall continue to be effective until the principal of and interest on the bonds for the benefit of which the same are made has been fully paid or provision for such payment duly made.
(b) In the event of default in any such payment or in any agreements of the authority made as part of the contract under which the bonds were issued, whether contained in the resolution authorizing the bonds or in any trust indenture executed as security for such bonds, said payment or agreement may be enforced by suit, mandamus, or either of such remedies.
(3) Any bank or trust company that may act as depository of the proceeds of bonds or of revenues or other moneys may furnish such indemnifying bonds or pledge such securities as required by the authority.
Source: L. 79: Entire article added, p. 818, § 1, effective July 1. L. 84: (1)(a), (1)(c), and
(2)(a) amended, p. 627, § 26, effective April 10. L. 2004: (1)(a), (1)(c), (2), and (3) amended, p. 570, § 18, effective July 1.