§ 52:18B-7 — Issuance of securities by corporation.

New Jersey § 52:18B-7

• Jurisdiction: New Jersey
• Title 52: STATE GOVERNMENT, DEPARTMENTS AND OFFICERS

Text

7. a. (1) The corporation shall have power and is hereby authorized from time to time to issue securities in such principal amount or amounts as the corporation shall determine to be necessary to provide sufficient funds for achieving its authorized purposes, consisting of the purchase of all or a portion of the State's tobacco receipts pursuant to section 5 of this act and the payment of or provision for financing costs. (2) The issuance of securities shall be authorized by a corporation resolution. No corporation resolution authorizing the issuance of securities (including securities issued to refund securities) pursuant to this act shall be adopted or otherwise made effective without the approval in writing of the State Treasurer. Securities (including securities issued to refund securities) may be issued without obtaining the consent of any department, division, commission, board, bureau or agency of the State, other than the approval as required by this subsection, and without any other proceedings or the occurrence of any other conditions or other things other than those proceedings, conditions or things which are specifically required by this act. Every issue of securities shall be special revenue obligations payable from and secured by a pledge of encumbered tobacco revenues and other assets, including without limitation those proceeds of such securities deposited in a reserve fund for the benefit of the owners of the securities, earnings on funds of the corporation and such other funds as may become available, upon such terms and conditions as approved by the State Treasurer and as specified by the corporation in the corporation resolution pursuant to which the securities are issued or in a related trust agreement or trust indenture. (3) The corporation shall issue securities to refund any securities by the issuance of new securities, whenever it deems such refunding expedient, whether the securities to be refunded have or have not matured, and to issue securities partly to refund securities then outstanding and partly for any of its other authorized purposes. The refunding securities may be exchanged for the securities to be refunded or sold and the proceeds applied to the purchase, redemption or payment of such securities. b. Each issue of securities shall be dated, shall bear interest (which, under the code, may be includable in or excludable from the gross income of the owners for federal income tax purposes) at such fixed or variable rates, payable at or prior to maturity, and shall mature at such time or times, as may be determined by the corporation and may be made redeemable before maturity, at the option of the corporation, at such price or prices and under such terms and conditions as may be fixed by the corporation. The principal and interest of such securities may be made payable in any lawful medium. The corporation shall determine the form of the securities, either coupon, registered or book-entry form, and the manner of execution of the securities and shall fix the denomination or denominations of the securities and the place or places of payment of principal and interest thereof, which may be at any bank or trust company within or without the State. If any officer whose signature or a facsimile thereof appears on any securities or coupons shall cease to be such officer before the delivery of such securities, such signature or facsimile shall nevertheless be valid and sufficient for all purposes as if he or she had remained in office until such delivery. The securities may be issued in coupon or in registered form or both, as the corporation may determine, and provisions may be made for the registration of any coupon securities as to principal alone and as to both principal and interest and for the reconversion of any securities registered as to both principal and interest into coupon securities. The corporation may also provide for temporary securities and for the replacement of any security that shall become mutilated or shall be destroyed or lost. c. The corporation with the approval of the State Treasurer may sell such securities in such manner, either at public or private sale and on either a competitive or negotiated basis. The proceeds of such securities shall be disbursed for the purposes for which such securities were issued as the act, the sale agreement and the corporation resolution authorizing the issuance of such securities or the related trust agreement or trust indenture may provide. d. Any pledge made by the corporation shall be valid and binding at the time the pledge is made. The revenues, reserves or earnings so pledged or earnings on the investment thereof 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. Notwithstanding any other provision of law to the contrary, neither the corporation resolution nor any trust agreement or trust indenture or other instrument by which a pledge is created or by which the corporation's interest in encumbered tobacco revenues, reserves or earnings thereon is assigned need be filed or recorded in any public records in order to protect the pledge thereof or perfect the lien thereof as against third parties, except that a copy thereof shall be filed in the records of the corporation. e. Notwithstanding the provisions of any other law to the contrary, any securities issued pursuant to this act shall be fully negotiable within the meaning and for all purposes of Title 12A of the New Jersey Statutes, and each owner of such a security or other obligation, or of any coupon appurtenant thereto, by accepting the security or coupon shall be conclusively deemed to have agreed that the security or coupon is and shall be fully negotiable within the meaning and for all purposes of Title 12A. f. In the discretion of the corporation, any securities and any ancillary facilities may be secured by a trust agreement or trust indenture by and between the corporation and the trustee thereunder, which may be any trust company or bank having the powers of a trust company, whether located within or without the State. Such trust agreement or trust indenture or corporation resolution providing for the issuance of such securities may provide for the creation and maintenance of such reserves as the corporation shall determine to be proper and may include covenants setting forth the duties of the corporation in relation to the securities, the ancillary facilities, the income to the corporation, the sale agreement, the encumbered tobacco revenues and residual interests. Such trust agreement or trust indenture or corporation resolution may contain provisions respecting the custody, safeguarding and application of all moneys and securities and may contain such provisions for protecting and enforcing the rights and remedies (pursuant thereto and to the sale agreement) of the owners of the securities and benefitted parties as may be reasonable and proper and not in violation of law. It shall be lawful for any bank or trust company incorporated under the laws of the State which may act as depository of the proceeds of securities or of any other funds or obligations received on behalf of the corporation to furnish such indemnifying bonds or to pledge such obligations as may be required by the corporation. Any such trust agreement or trust indenture or corporation resolution may contain such other provisions as the corporation may deem reasonable and proper for priorities and subordination among the owners of the securities and benefitted parties. g. The corporation may enter into, amend or terminate, as it determines to be necessary or appropriate, any ancillary facilities (1) to facilitate the issuance, sale, resale, purchase, repurchase or payment of securities or the making or performance of swap contracts, including without limitation bond insurance, letters of credit and liquidity facilities or (2) to attempt to hedge risk or achieve a desirable effective interest rate or cash flow. The determination of the corporation that an ancillary facility or the amendment or termination thereof is necessary or appropriate as aforesaid shall be conclusive. Such ancillary facility shall be made upon the terms and conditions established by the corporation, including without limitation provisions as to security, default, termination, payment, remedy and consent to service of process. h. The corporation may enter into, amend or terminate any ancillary facility as it determines to be necessary or appropriate to place the obligations or investments of the corporation, as represented by the securities or the investment of their proceeds, in whole or in part, on the interest rate, cash flow or other basis desired by the corporation, which facility may include without limitation contracts commonly known as interest rate swap agreements, and futures or contracts providing for payments based on levels of, or changes in, interest rates. These contracts or arrangements may be entered into by the corporation in connection with, or incidental to, entering into, or maintaining any (1) agreement which secures securities of the corporation or (2) investment, or contract providing for investments, of reserves or similar facility guaranteeing an investment rate for a period of years. The determination by the corporation that an ancillary facility or the amendment or termination thereof is necessary or appropriate as aforesaid shall be conclusive. Any ancillary facility may contain such payment, security, default, remedy, termination provisions and payments and other terms and conditions as determined by the corporation, after giving due consideration to the creditworthiness of the counterparty or other obligated party, including without limitation any rating by any nationally recognized rating agency, and any other criteria as may be appropriate. i. Securities and ancillary facilities may contain a recital that they are issued pursuant to this act, which recital shall be conclusive evidence of their validity, the validity of any ancillary facility and the regularity of the proceedings relating thereto. j. Neither the members of the corporation nor any other person executing the securities or an ancillary facility shall be subject to any personal liability or accountability by reason of the issuance or execution and delivery thereof. L.2002,c.32,s.7.