Every financing agreement shall contain covenants obligating such participating institution for higher learning to effect the completion of the project if the proceeds of the bonds available therefor prove insufficient. Every financing agreement shall obligate the participating institution for higher learning to make payments which shall be sufficient (1) to pay the cost of maintaining, repairing, and operating the project and each and every portion thereof, to the extent that the payment of such cost has not otherwise been adequately provided for, (2) to pay the principal of and the premium, if any, and the interest on outstanding bonds of the authority issued in respect of such project as the same shall become due, and payable and (3) to create and maintain reserves deemed by the authority to be advisable in connection with the project. Such payments shall not be subject to supervision or regulation by any department, commission, board, body, bureau, or agency of this State other than the authority. In connection with any bonds, the authority may set aside from amounts derived from a financing agreement, or may cause a participating institution for higher learning to set aside, at such time or times as shall be determined by the authority, such amounts as may be determined by the authority in a sinking or other similar fund which may be pledged to, and charged with, the payment of the principal of and the interest on such revenue bonds as the same shall become due, and the redemption price or the purchase price of bonds retired by redemption or purchase as therein provided. Such pledge shall be valid and binding from the time when the pledge is made; the monies so pledged and thereafter received by the authority or the participating institution for higher learning shall immediately be subject to the lien of such pledge without 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 authority or the participating institution for higher learning, irrespective of whether such parties have notice thereof.
The use and disposition of money to the credit of such sinking or other similar fund shall be subject to the provisions of the proceedings authorizing the issuance of such bonds or of the trust agreement securing such bonds. Any such proceedings or trust agreement may provide that such sinking or other similar fund shall be the fund for a particular project at an institution for higher learning from which such funds are derived and for the bonds issued to finance such project and may, additionally, permit and provide for the issuance of bonds having a subordinate lien in respect of the security herein authorized to other revenue bonds of the authority and, in such case, the authority may create separate or other similar funds in respect of such subordinate lien bonds.
HISTORY: 1962 Code Section 22-41.11; 1969 (56) 444; 1993 Act No. 167, Section 8.