1. (a) Any promissory notes received under section 56 of this chapter:

   1. (1) must have the same principal amounts, maturities, and interest rates as the bonds being issued;
   2. (2) may be secured by a first mortgage lien on the educational facility being financed or by a first mortgage lien or security interest in other real or personal property or funds acceptable to the authority subject to any exceptions that the authority may approve and created by a mortgage instrument or security agreement satisfactory to the authority; and
   3. (3) may be insured or guaranteed by others.

2. (b) Any bonds described in section 56 of this chapter must be payable solely out of the payments to be made on the promissory notes and under the corresponding agreement. Any bonds described in section 56 of this chapter may not exceed in principal amount the cost of the educational facility, as determined by the nonprofit college or university, or the necessary amount of these liability or other loss insurance reserves, and approved by the authority. In other respects:

   1. (1) the bonds are subject to the provisions of section 39 of this chapter; and

   2. (2) the trust agreement or indenture creating the bonds may contain any of the provisions set forth in section 40 of this chapter that the authority determines appropriate.

      [Pre-2007 Higher Education Recodification Citation: 20-12-63-26(a) part.]

As added by P.L.2-2007, SEC.69.