California Government Code

§ 91536

GOV § 91536Title 10 · Ch. 1 · Art. 2

Statute text

In the discretion of an authority, any bonds issued under the provisions of this title may be secured by an indenture. Such indenture may vest in bondholders the right to remove and appoint a new trustee or agent. The trustee or agent may at any time own all or any part of the bonds, unless otherwise provided in the indenture. Such indenture may vest in such trustee, bondholder, or agent, as provided therein, property, rights, powers and duties, and may pledge, encumber, or assign the revenues, the project agreements and any other rights as security for the bonds and for the benefit of the bondholders, subject to such agreements with bondholders as may then exist. Such indenture may contain covenants of the authority as to the acquisition of property, the disposition of any property, or part thereof, the subjecting of additional property thereto or to the lien thereof, the issuance of additional bonds, the custody, deposit, investment and application of all moneys, the creation and maintenance of reserves, the disposition of insurance or condemnation proceeds, and the use of surplus bond proceeds. Any such indenture may define events of default thereunder, which may include events of default of a company under the project agreements, may specify the action to be taken by the trustee, bondholder, or agent upon an event of default, may set forth the rights and remedies of the bondholders and of the trustee or agent, and may, in the case of a trustee, restrict the individual right of action by bondholders. In addition, any such indenture may contain such other provisions as the board may deem reasonable and proper and which relate in any way to the security or protection of bondholders. All expenses incurred in carrying out the provisions of such indenture shall be treated as an administration expense. Any lien or other interest established by any indenture shall be valid and binding from the date thereof, and any revenues or amounts to cover administration expenses thereafter received by, or on behalf of, an authority or trustee or agent thereunder shall immediately be subject to the lien thereof or other interest established thereby without any further act, which lien or other interest shall be valid and binding as against all persons, irrespective of notice, without any filing or recording except a filing in the records of the authority. If so provided in the indenture, all or designated revenues shall further be deemed to be trust funds and shall be held and applied solely as provided in such indenture, and no bondholder shall, as such, be in any manner obligated to see to the proper application thereof.

Legislative history

Amended by Stats. 1982, Ch. 1605, Sec. 13.