N.Y. Public Authorities Law § 3035: Exchange of notes or bonds of the corporation for short-term obligations of the city

* § 3035. Exchange of notes or bonds of the corporation for short-term

obligations of the city. 1. The corporation may issue its notes or bonds

in exchange for short-term obligations of the city, provided that the

principal amount of the corporation's notes or bonds issued in any such

exchange shall not exceed the principal amount of such short-term

obligations and accrued interest thereon at the stated rate to the date

of such exchange.

2. (a) Upon or at any time after receipt of the short-term obligations

of the city exchanged in accordance with subdivision one hereof, the

corporation may deliver any or all of such short-term obligations to the

city for cancellation, without receiving payment of principal or

interest in respect thereof, in which event the city shall thereupon

cancel such obligations without making any payment of principal amount

or accrued interest thereon and the city shall have no further liability

with respect thereto. Notwithstanding the foregoing, the corporation

shall not deliver at any time bond anticipation notes received pursuant

to subdivision one to the city for cancellation without receiving

payment of principal or interest in respect thereof unless the mayor and

the city comptroller shall have requested in writing that such

short-term obligations be delivered for cancellation.

(b) Upon or at any time after receipt of the short-term obligations of

the city exchanged in accordance with subdivision one hereof the

corporation may exchange any or all of such short-term obligations for

other short-term obligations issued by the city pursuant to the local

finance law and the corporation may exchange any or all of such bond

anticipation notes included in such short-term obligations for bonds of

the city issued pursuant to the local finance law, all on such terms and

conditions as the corporation may deem proper.

3. The corporation shall not exchange any of its bonds or notes for

short-term obligations of the city pursuant to subdivision one hereof

unless (a) the city shall have agreed to observe the conditions set

forth in section three thousand thirty-eight of this chapter, subject to

such modifications as are permitted thereunder and as the corporation

may then approve, and (b) the board of directors of the corporation

shall have determined that the terms of such exchange will not prejudice

the rights of holders of other bonds and notes of the city.

* NB The corporation shall continue for a term ending the later of

July 1, 2008 or one year after its liabilities have been fully paid and

discharged per § 3033 sub 1.