52:27-45.6. Covenants in ordinance or resolution protecting security and rights of warrant holders

Any ordinance or resolution authorizing the issuance of warrants hereunder may contain covenants of any such municipality to protect and safeguard the security and rights of the holders of any such warrants, and without limiting the generality of the foregoing, such ordinance or resolution may contain covenants as to

(1) the manner in which warrants issued thereunder may be issued or be exchanged for outstanding claims or evidences of indebtedness funded or refunded thereby and the terms and conditions upon which such warrants may become a charge upon the special fund or funds created by any such ordinance or resolution;

(2) the collection, depositing, custody and disbursement of moneys or other assets coming into any special fund or funds created hereunder for the payment of warrants, including a specification of the depositaries to be designated to hold such deposits and granting to such depositaries or other banks or trust companies authority to act as fiscal agent of any such municipality for the custody of the moneys or other assets held in any special fund or funds created hereunder, and to represent holders of such warrants in the event of a default on same or in the event of a default in the performance of any duty or obligation of any such board, municipality or the corporate authorities thereof in connection therewith, with such powers and duties for the enforcement of such warrants as such ordinance or resolution may provide;

(3) the deposit of collateral security or indemnity bonds to secure the proceeds of the liquidation of all moneys and assets under the control of the board, and limitations on the amount, if any, of additional warrants or other claims or obligations of whatsoever kind or nature which may be issued and payable from the special fund or funds established in the ordinance or resolution authorizing issuance of warrants hereunder;

(4) limitations upon the creation of additional liens or encumbrances on the real estate or other assets to be liquidated by said board, the terms and conditions upon which the real estate and other assets under the control of the board for liquidation may be sold, exchanged, leased or otherwise disposed of, and the use or other disposition of all funds received in the process of liquidation;

(5) the validity and enforceability of the certificates of tax sale, or tax and assessment title liens, and the title of the municipality to real estate or rights or interests therein standing in the name of the municipality which shall have been pledged to any special fund or funds created hereunder, and the obligation of any such municipality to replace in said fund or funds additional assets of at least equal book value in lieu of any such assets which have been declared by any court of competent jurisdiction to be illegal or unenforceable;

(6) such other covenants as may be deemed necessary or desirable to insure the speedy, efficient and economical liquidation of the assets pledged to such special fund or funds and the application of the proceeds thereof to the payment of the principal of and interest on the warrants issued pursuant to such ordinance or resolution within a reasonable time and at reasonable expense.

The provisions of this act and of any such ordinance or resolution shall constitute a contract with the holders of such warrants and the provisions thereof shall be enforceable by a proceeding in lieu of a prerogative writ or any other appropriate action or proceeding in any court of competent jurisdiction by the commission or by any owner or holder of such warrants on behalf of himself individually or all other owners or holders of said warrants.

L.1939, c. 56, p. 87, s. 6. Amended by L.1953, c. 49, p. 878, s. 45.