Rentals and Moneys Payable Under Lease; Payment to Trustee Under Trust Agreement for Repayment of Bonds; Pledges; Trust Agreements

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Section 14. All rentals or other monies payable under a financing document shall be paid to the trustee under the trust agreement securing the bonds. The issuing municipality acting by and through an authority is further authorized to pledge such rentals and other revenues to the payment of the interest on and the principal of said bonds. Such pledge shall be valid and binding from the time when the pledge is made; the rentals or other revenues or other monies so pledged and thereafter received by the municipality acting by and through an authority or the trustee on its behalf shall immediately be subject to the 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 all parties having claims of any kind in tort, contract or otherwise against the issuer, irrespective of whether such parties have notice thereof. A trust agreement by which a pledge is created or a financing statement need not be filed or recorded under the Uniform Commercial Code or otherwise except in the records of the authority.

The monies so pledged shall be set aside, at such regular intervals and in such amounts as may be provided in the trust agreement, in the sinking fund for the payment of such interest, principal and the redemption price or purchase price of such bonds. The use and disposition of monies to the credit of such sinking fund shall be subject to the provisions of the trust agreement. Except as may otherwise be provided in the trust agreement, such sinking fund shall be a fund for all such bonds without distinction or priority of one over another. The balance of such rentals and other revenues not needed for such sinking fund requirements shall be applied as may be provided in the trust agreement.


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