Sec. 223.028. SECURITY FOR BONDS. (a) Bonds issued under this chapter may be secured by a trust agreement between the issuer and a trust company or bank having the powers of a trust company in this state.
(b) A trust agreement may pledge or assign lease income, contract payments, fees, or other charges to be received from a nonprofit organization. The governing body of the issuer may secure the bonds additionally by a mortgage, a deed of trust lien, or other security interest on a designated hospital project vesting in the trustee the power to sell the hospital project for the payment of the indebtedness, the power to operate the hospital project, and any other power for the further security of the bonds.
(c) The trust agreement may:
(1) evidence a pledge of all or any part of the revenue of the issuer from the ownership, operation, lease, use, mortgage, or sale of a hospital project for the payment of principal of, any redemption premium for, and interest on the bonds when due and payable;
(2) provide for the creation and maintenance of reserves;
(3) set forth the rights and remedies of the bondholders and of the trustee;
(4) restrict the individual right of action by bondholders as is customary in trust agreements securing bonds and debentures of corporations;
(5) contain provisions the issuer considers reasonable and proper for the security of the bondholders; and
(6) provide for the issuance of bonds to replace lost, stolen, or mutilated bonds.
(d) A trust agreement or resolution providing for the issuance of bonds may provide for protecting and enforcing the rights and remedies of the bondholders as reasonable and proper, including covenants setting forth the duties of the issuer and the nonprofit organization in relation to:
(1) the acquisition of property and the construction, improvement, maintenance, repair, operation, and insurance of the hospital project in connection with which the bonds are issued; and
(2) the custody, safeguarding, and application of all money.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
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