N.Y. Public Authorities Law § 2536: Notes and bonds of the corporation

§ 2536. Notes and bonds of the corporation. 1. (a) The corporation

shall have power and is hereby authorized from time to time to issue its

negotiable notes and bonds in conformity with applicable provisions of

the uniform commercial code in such principal amount, as the corporation

shall determine to be necessary, to provide sufficient funds for

achieving its corporate purposes, including the making of payments to

the city, the payment of interest on notes and bonds of the corporation,

the establishment of reserves to secure such notes and bonds, and the

payment of all operating expenses of the corporation and all other

expenditures of the corporation incidental to or necessary or convenient

to carry out its corporate purposes and powers.

(b) The corporation shall have the power, from time to time, to issue

(i) notes to renew notes and (ii) bonds to pay notes, including the

interest thereon and, whenever it deems 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 other corporate purposes. The

refunding bonds may be exchanged for the bonds to be refunded or sold

and the proceeds applied to the purchase, redemption or payment of such

bonds.

(c) Except as may otherwise be expressly provided by the corporation,

every issue of its notes and bonds shall be general obligations of the

corporation payable out of any revenues of the corporation, subject only

to any agreements with the holders of particular notes or bonds pledging

any particular revenues.

(d) The notes and bonds shall be authorized by resolution of the

corporation, shall bear such date and shall mature at such time as such

resolution may provide, except that no note or bond or the renewal or

refunding thereof shall mature more than ten years from the date of the

original issue of such note or bond. The bonds may be issued as serial

bonds or as term bonds or as a combination thereof. Provision for the

payment of principal of and interest on bonds shall be made in not more

than ten approximately equal annual installments or in not more than

twenty approximately equal semi-annual installments. The notes and bonds

shall bear interest at such rate and shall be in such denomination, be

in such form, either coupon or registered, carry such registration

privileges, be executed in such manner, be payable in such medium of

payment, at such place and be subject to such terms of redemption as

such resolution may provide. The notes and bonds may be sold by the

corporation at public or private sale, at such price as the corporation

shall determine.

2. Any resolution authorizing any notes or bonds or any issue thereof

may contain provisions, which shall be a part of the contract with the

holders thereof, 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 such agreements

with noteholders or bondholders as may then exist;

(b) pledging all or any part of the assets of the corporation to

secure the payment of the notes or bonds or of any issue of notes or

bonds, subject to such agreements with noteholders or bondholders as may

then exist;

(c) the setting aside of reserves or sinking funds and the regulation

and disposition thereof;

(d) limitations on the purpose to which the proceeds of sale of notes

or bonds may be applied and pledging such proceeds to secure the payment

of the notes or bonds or of any issue thereof;

(e) limitations on the issuance of additional notes or bonds; the

terms upon which additional notes or bonds may be issued and secured;

and the refunding of outstanding or other notes or bonds;

(f) 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 the holders of which must consent thereto, and the manner

in which such consent may be given;

(g) limitations on the amount of moneys to be expended by the

corporation for operating expenses of the corporation;

(h) vesting in a trustee such 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

bondholders pursuant to this title, and limiting or abrogating the right

of the bondholders to appoint a trustee under this title or limiting the

rights, powers and duties of such trustee;

(i) 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 event of such default, including the right to

appointment of a receiver; providing, however, that such rights and

remedies shall not be inconsistent with the general laws of the state

and the other provisions of this title;

(j) 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.

3. Any pledge made by the corporation shall be valid and binding from

the time when the pledge is made. The revenues or property so pledged

and thereafter received by the corporation shall immediately be subject

to the lien of such pledge 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 such parties

have notice thereof. Neither the resolution nor any other instrument by

which a pledge is created need be recorded or filed to protect such

pledge except in the office of the corporation.

4. Neither the directors of the corporation nor any other person

executing the notes or bonds of the corporation shall be subject to any

personal liability or accountability by reason of the issuance thereof.

5. The corporation, subject to such agreements with noteholders or

bondholders as may then exist, shall have power out of any funds

available therefor, to purchase notes or bonds of the corporation, which

shall thereupon be cancelled, at a price not exceeding:

(a) if the notes or bonds are then redeemable, the redemption price

then applicable.

(b) if the notes or bonds are not then redeemable, the redemption

price applicable on the first date after such purchase upon which the

notes or bonds becme subject to redemption.

6. In the discretion of the directors of the corporation, the bonds

may be secured by a trust indenture by and between the corporation and a

corporate trustee, which may be any trust company or bank having the

powers of a trust company in the state. Such trust indenture may contain

such provisions for protecting and enforcing the rights and remedies of

the 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 moneys. The Corporation may provide

by such trust indenture for the payment of the proceeds of the bonds and

the revenues to the trustee under such trust indenture or other

depository, and for the method of disbursement thereof, with such

safeguards and restrictions as it may determine. All expenses incurred

in carrying out such trust indenture may be treated as a part of the

operating expenses of the corporation. If the bonds shall be secured by

a trust indenture, the bondholders shall have no authority to appoint a

separate trustee to represent them.

7. Whether or not the notes and bonds are of such form and character

as to be negotiable instruments under the terms of the uniform

commercial code, the notes and bonds are hereby made 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 for registration.

8. The corporation shall not issue any bonds or notes if such issue

would bring the aggregate amount of indebtedness evidenced by bonds or

notes of the corporation issued pursuant to this title to an amount

exceeding five hundred twenty million dollars. In calculating the amount

of indebtedness issued by the corporation pursuant to this title, there

shall be excluded the amount of indebtedness to be refunded or renewed

from the proceeds from the sale of, or to be exchanged for, new

obligations.