2006 Utah Code - 9-4-913 — Power to borrow money and make loans -- Issuance of notes and bonds.

     9-4-913.   Power to borrow money and make loans -- Issuance of notes and bonds.
     (1) The corporation has the power and is authorized to borrow money and to issue from time to time its notes, bonds, and other obligations in such principal amounts as the corporation determines is necessary to provide sufficient funds for:
     (a) the purchase of mortgage loans from mortgage lenders;
     (b) the making of construction loans;
     (c) the making of loans to housing authorities;
     (d) the payment of interest on bonds, notes, and other obligations of the corporation;
     (e) the establishment of reserves to secure the bonds, notes, and other obligations;
     (f) the making of mortgage loans;
     (g) the making of loans to mortgage lenders or other lending institutions with respect to multifamily residential rental housing under terms and conditions requiring the proceeds of these loans to be used by these mortgage lenders or other lending institutions for the making of loans for new multifamily residential rental housing or the acquisition or rehabilitation of existing multifamily residential rental housing;
     (h) the making of loans for the rehabilitation of residential housing; and
     (i) all other expenditures of the corporation incident to and necessary or convenient to carry out its purposes and powers.
     (2) (a) The corporation shall have the power to issue notes to renew notes and bonds to pay notes, including the interest thereon, and whenever it considers refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund bonds then outstanding and partly for any of its corporate purposes.
     (b) The refunding bonds may be:
     (i) sold and the proceeds applied to the purchase, redemption, or payment of the bonds to be refunded; or
     (ii) exchanged for the bonds to be refunded.
     (3) (a) Except as may otherwise be expressly provided by the corporation, every issue of its notes or bonds shall be general obligations of the corporation payable solely out of any revenues or monies of the corporation, subject only to any agreements with the holders of particular notes or bonds pledging any particular monies or revenues.
     (b) These bonds or notes may be additionally secured by a pledge of any grant or contribution from the federal government or any corporation, association, institution, or person or a pledge of any monies, income, or revenues of the corporation from any source.
     (4) (a) The notes and bonds shall be authorized by resolution or resolutions of the corporation, shall bear the date or dates, and shall mature at the time or times as the resolution or resolutions may provide, except that no note, including any renewals thereof, shall mature more than five years from the date of its original issue, and no bond shall mature more than 50 years from the date of its issue, as the resolution may provide.
     (b) The notes and bonds shall bear interest at the rate or rates, including variations in the rates, be in denominations, be in a form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in a medium of payment, at the place or places, and be subject to the terms of redemption, including redemption prior to maturity, as the resolution or resolutions may provide.
     (c) The notes and bonds of the corporation may be sold by the corporation at public or

private sale, and at the price or prices as the corporation shall determine.
     (d) (i) The notes and bonds may bear interest at a variable interest rate as the resolution may provide.
     (ii) The resolution may establish a method, formula, or index pursuant to which the interest rate on the notes and bonds may be determined from time to time.
     (e) In connection with the notes and bonds the corporation may authorize and enter into agreements or other arrangements with financial, banking, and other institutions for letters of credit, standby letters of credit, surety bonds, reimbursement agreements, remarketing agreements, indexing agreements, tender agent agreements, and other agreements with respect to securing the notes and bonds, with respect to enhancing the marketability and credit worthiness of the notes and bonds, with respect to determining a variable interest rate on the notes and bonds, and with respect to the payment from any legally available source (which may include the proceeds of the notes and bonds) of fees, charges, and other amounts coming due with respect to any such agreements.
     (5) Any resolution or resolutions authorizing any notes or bonds or their issue may contain provisions, which shall be a part of the contract or contracts with their holders, as to:
     (a) pledging all or any part of the revenues to secure the payment of the notes or bonds or of any issue thereof, subject to the agreements with noteholders or bondholders as may then exist;
     (b) pledging all or any part of the assets of the corporation, including mortgages and obligations securing the same, to secure the payment of the notes or bonds or of any issue of notes or bonds, subject to the agreements with noteholders or bondholders as may then exist;
     (c) the use and disposition of the gross income from mortgages owned by the corporation and payment of principal of mortgages owned by the corporation;
     (d) the setting aside of reserves or sinking funds and their regulation and disposition;
     (e) limitations on the purpose to which the proceeds of sale of notes or bonds may be applied and pledging the proceeds to secure the payment of the notes or bonds or of their issue;
     (f) limitations on the issuance of additional notes or bonds, including:
     (i) the terms upon which additional notes or bonds may be issued and secured; and
     (ii) the refunding of outstanding or other notes or bonds;
     (g) the procedure, if any, by which the terms of any contract with noteholders or bondholders may be amended or abrogated, the amount of notes or bonds to which the holders must consent, and the manner in which the consent may be given;
     (h) limitations on the amount of monies to be expended by the corporation for operating expenses of the corporation;
     (i) vesting in a trustee or trustees the property, rights, powers, and duties in trust as the corporation may determine, which may include any or all of the rights, powers, and duties of the trustee appointed by the noteholders or bondholders pursuant to this act and limiting or abrogating the right of noteholders or bondholders to appoint a trustee under this act or limiting the rights, powers, and duties of the trustee;
     (j) defining the acts or omissions to act which shall constitute a default in the obligations and duties of the corporation to the holders of the notes or bonds and providing for the rights and remedies of the holders of the notes or bonds in the event of default, including as a matter of right the appointment of a receiver; but the rights and remedies may not be inconsistent with the general laws of the state and other provisions of this part; or
     (k) any other matters, of like or different character, which in any way affect the security

or protection of the holders of the notes or bonds.
     (6) (a) Any pledge made by the corporation shall be valid, enforceable, and binding from the time when the pledge is made and shall have a lien priority based on the time of grant or, if more than one lien is granted at a given time, as set forth in the resolution or instrument pursuant to which the pledge is made.
     (b) The revenues, monies, or property so pledged and thereafter received by the corporation shall immediately be subject to the lien of the pledge and shall constitute a perfected lien 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 corporation, irrespective of whether the parties have notice thereof.
     (c) Neither the resolution nor any other instrument by which a pledge is created need be recorded.
     (7) The corporation, subject to the agreements with noteholders or bondholders as may then exist, shall have power out of any funds available for it to purchase notes or bonds of the corporation, which shall immediately be cancelled, at a price not exceeding:
     (a) if the notes or bonds are then redeemable, the redemption price then applicable plus accrued interest to the next interest payment thereon; or
     (b) if the notes or bonds are not then redeemable, the redemption price applicable on the first date after the purchase upon which the notes or bonds become subject to redemption plus accrued interest to the date.
     (8) (a) The notes and bonds shall be secured by a trust indenture by and between the corporation and a corporate trustee, which may be any bank having the power of a trust company or any trust company within or without the state.
     (b) The trust indenture may contain provisions for protecting and enforcing the rights and remedies of the noteholders or bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the corporation in relation to the exercise of its corporate powers and the custody, safeguarding, and application of all monies.
     (c) The corporation may provide by the trust indenture for the payment of the proceeds of the notes or bonds and the revenues to the trustee under the trust indenture or other depository, and for the method of their disbursement, with any safeguards and restrictions as it may determine.
     (d) All expenses incurred in carrying out the trust indenture may be treated as a part of the operating expenses of the corporation.
     (e) If the notes or bonds shall be secured by a trust indenture, the noteholders or bondholders may not have authority to appoint a separate trustee to represent them.
     (9) Whether or not the notes and bonds are of the form and character as to be negotiable instruments under the terms of the Uniform Commercial Code, the notes and bonds are negotiable instruments within the meaning of and for all the purposes of the Uniform Commercial Code, subject only to the provisions of the notes and bonds relating to registration.
     (10) In the event that any of the trustees or officers of the corporation shall cease to be trustees or officers of the corporation prior to the delivery of any notes or bonds or coupons signed by them, their signatures or facsimiles of their signatures shall nevertheless be valid and sufficient for all purposes, the same as if the trustees or officers had remained in office until the delivery.
     (11) Neither the trustees of the corporation nor any other person executing the notes or

bonds issued under this chapter are subject to personal liability or accountability by reason of the issuance thereof.
     (12) The corporation shall have the power to provide for the replacement of lost, destroyed, or mutilated bonds or notes.

Amended by Chapter 319, 2001 General Session