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December 21, 2024 Clouds | 28°F
The 193rd General Court of the Commonwealth of Massachusetts

Section 47: Issue of shares, bonds, notes or other evidences of indebtedness

Section 47. A railroad corporation may issue shares of capital stock, bonds, notes or other evidences of indebtedness, for the purpose of funding its floating debt or for any other lawful purpose, and may mortgage or pledge as security for the payment of such indebtedness a part or all of its railroad, equipment and franchise and a part or all of its real and personal property, including property to be afterward acquired. Any mortgage executed by a railroad company shall secure, on equal terms with any other indebtedness secured by such mortgage, all bonds, notes and other evidences of indebtedness previously issued and then outstanding of which such corporation is the maker or which it has assumed through merger or consolidation with the original and principal obligor, except outstanding bonds, notes or other evidences of indebtedness while and so long as the same are, in accordance with any promise contained therein, secured by another direct mortgage; but the term ''mortgage'' as used herein shall not include or apply to the pledge of securities deposited with a trustee as collateral to secure the repayment of a loan. Its bonds, notes or other evidences of indebtedness, payable at periods of more than one year from the date thereof, may be issued by any such corporation to an amount which, when added to the amount of all its then outstanding bonds, notes or other evidences of indebtedness, payable at periods of more than one year from the date thereof, of which it is the maker or which it has assumed, shall not cause the aggregate amount of all such bonds, notes and other evidences of indebtedness to exceed the amount of the capital stock of the corporation actually paid in at the time, as determined under section fifty-three of chapter one hundred and fifty-nine, unless any excess above such amount shall have been previously approved by the department as consistent with the public interest, taking into consideration the fixed charges of such corporation, the amount and character of its contingent liabilities and other pertinent conditions; but in no event shall the aggregate amount of all bonds, notes or other evidences of indebtedness of which it is the maker or which it has assumed exceed twice the amount of said capital stock as determined as aforesaid; but such of the bonds issued or to be issued under a mortgage as are deposited to retire, at or before maturity, bonds or other evidences of indebtedness previously issued and outstanding at the date of such mortgage, while so deposited, shall not be taken into account in applying these limitations. No bonds, coupon notes or other evidences of indebtedness payable at periods of more than one year from the date thereof shall be issued unless authorized by a vote of the stockholders at a meeting called for the purpose, and no such bonds, coupon notes or other evidences of indebtedness shall be issued unless countersigned and authenticated by a person or trust company appointed by the corporation for that purpose.