N.Y. Tobacco Settlement Financing Corporation Act § 8: Remedies of bondholders

§ 8. Remedies of bondholders. 1. Subject to the provisions of section

six of this act, in the event that the corporation shall default in the

payment of principal of, or interest on, or sinking fund payment on, any

issue of bonds after the same shall become due, whether at maturity or

upon call for redemption, or in the event that the corporation or the

state shall default in any agreement made with the holders of any issue

of bonds, the holders of twenty-five per centum in aggregate principal

amount of the bonds of such issue then outstanding, by instrument or

instruments filed in the office of the clerk of the county of Albany and

proved or acknowledged in the same manner as a deed to be recorded, may

appoint a trustee to represent the holders of such bonds for the

purposes herein provided.

2. Such trustee, or any trustee appointed under this act, may, and

upon written request of the holders of twenty-five per centum in

principal amount of such bonds then outstanding shall, in his or its own

name:

(i) by suit, action or proceeding in accordance with the civil

practice law and rules, enforce all rights of the bondholders, including

the right to require the corporation to carry out any agreement with

such holders and to perform its duties under this act;

(ii) bring suit upon such bonds;

(iii) by action or suit, require the corporation to account as if it

were the trustee of an express trust for the holders of such bonds;

(iv) by action or suit, enjoin any acts or things which may be

unlawful or in violation of the rights of the holders of such bonds; and

(v) declare all such bonds due and payable, and if all defaults shall

be made good, then, with the consent of the holders of twenty-five per

centum of the principal amount of such bonds then outstanding, annul

such declaration and its consequences, provided, however, that nothing

herein shall preclude the corporation from agreeing that consent of the

provider of an ancillary bond facility is required for an acceleration

of related bonds in the event of a default other than a failure to pay

principal of or interest on the bonds when due.

3. The supreme court shall have jurisdiction of any suit, action or

proceeding by the trustee on behalf of such bondholders. The venue of

any such suit, action or proceeding shall be laid in the county of

Albany.

4. Before declaring the principal of bonds due and payable, the

trustee shall first give thirty days notice in writing to the

corporation.