§ 508 — Issuance of bonds and notes by a corporation

§ 508. Issuance of bonds and notes by a corporation. 1. Each\ncorporation shall have the power and is hereby authorized, from time to\ntime, to issue negotiable bonds and notes in such aggregate principal\namounts as shall, in the opinion of the corporation, be necessary\ntogether with such other moneys or funds as may be available to the\ncorporation, to provide funds sufficient to enable the corporation to\ncarry out its corporate purposes, including the acquisition,\nconstruction, maintenance and repair of personal and real property, the\npayment of interest on and amortization of or payment of such bonds and\nnotes, the establishment of reserves or sinking funds to secure such\nbonds and notes, and all other expenditures of the corporation incident\nto and necessary or desirable for the carrying out of its corporate\npurposes and the exercise of its powers. Except as may otherwise be\nexpressly provided by the corporation, every issue of its bonds and\nnotes shall be general obligations of the corporation payable out of any\nrevenues or moneys of the corporation, subject only to any agreements\nwith the holders of particular bonds or notes pledging any particular\nrevenues or moneys. Whether or not the bonds or notes are of such form\nand character as to be negotiable instruments under the provisions of\narticle eight of the uniform commercial code, the bonds and notes shall\nbe and are hereby made negotiable instruments within the meaning of and\nfor all purposes of article eight of the uniform commercial code,\nsubject only to the provisions of the bonds or notes for registration.\n 2. The corporation shall have the power and is hereby authorized, from\ntime to time, to issue renewal notes, and to refund any bonds by the\nissuance of new bonds, whether the bonds to be refunded have or have not\nmatured, and to issue bonds to pay notes or partly to refund bonds then\noutstanding.\n 3. The said bonds and notes shall be authorized by resolution or\nresolutions of the board of directors and shall mature as such\nresolution or resolutions may provide. Bonds and notes shall bear\ninterest at such rate or rates, be in such denominations, be in such\nform, either coupon or registered, carry such registration privileges,\nbe executed in such manner, be payable in such medium of payment, at\nsuch place or places, and be subject to such terms of redemption as such\nresolution or resolutions may provide. Bonds and notes may be sold by\nthe corporation at public or private sale at such price or prices as the\ncorporation shall determine; provided, however, that no such bonds or\nnotes may be sold at a private sale unless the sale and the terms\nthereof have been approved by the comptroller in writing.\n 4. Any resolution or resolutions authorizing any bonds or notes may\ncontain provisions, which shall be a part of the contract or contracts\nwith the holders thereof, as to:\n a. Pledging all or any part of the moneys or revenues or other assets\nof the corporation to secure the payment of such bonds or notes;\n b. The setting aside of reserves or sinking funds and the regulation\nor disposition thereof;\n c. Limitations on the purposes to which the proceeds of the sale of\nany issue of bonds or notes then or thereafter to be issued may be\napplied and pledging such proceeds to secure the payment of the bonds or\nnotes or any issue thereof;\n d. Limitations on the issuance of additional bonds or notes; the terms\nupon which such additional bonds or notes may be issued and secured; the\nrefunding of outstanding bonds or notes;\n e. The procedures, if any, by which the terms of any contract with the\nholders of bonds or notes may be extended or abrogated, the amount of\nbonds or notes the holders of which must consent thereto and the manner\nin which such consent may be given;\n f. The creation of special funds into which any moneys or revenues of\nthe corporation may be deposited;\n g. Limitations on the amounts that the corporation may expend for\nadministrative or other expenses thereof;\n h. Vesting in a trustee such properties, rights, powers and duties in\ntrust as the corporation may determine which may include any or all of\nthe rights, powers and duties of the trustees appointed by the holders\nof the bonds or notes pursuant to section five hundred twelve of this\narticle and limiting or abrogating the right of the holders of the bonds\nor notes to appoint a trustee under such section of limiting the rights,\nduties and powers of such trustee;\n i. Defining the acts or omissions to act which shall constitute a\ndefault in the obligations and duties of the corporation to the holders\nof the bonds or notes and providing for the rights and remedies of the\nholders of the bonds or notes in the event of such default, including as\na matter of right the appointment of a receiver; provided, however, that\nsuch rights and remedies shall not be inconsistent with the general laws\nof the state and the other provisions of this article; and\n j. Any other matters of like or different character that in any way\naffect the security or protection of the holders of the bonds or notes.\n 5. Any pledge of revenues, moneys or property made by the corporation\nshall be valid and binding from the time when the pledge is made; the\nrevenues, moneys or property so pledged and thereafter received by the\ncorporation shall immediately be subject to the lien of such pledge\nwithout any physical delivery thereof or further act, and the lien of\nany such pledge shall be valid and binding as against all parties having\nclaims of any kind in tort, contract or otherwise against the\ncorporation irrespective of whether such parties have notice thereof.\nNeither the resolution or resolutions nor any other instrument by which\na pledge is created need be recorded.\n 6. Neither the directors of the corporation nor any other person\nexecuting such bonds or notes shall be subject to any personal liability\nor accountability by reason of the issuance thereof.\n 7. The corporation, subject to such agreements with the holders of\nbonds or notes as may then exist, shall have the power out of any funds\navailable therefor to purchase any bonds or notes issued by it at a\nprice not exceeding the redemption price thereof, which price shall be:\n a. If the bonds or notes are then redeemable, the redemption price\nthen applicable plus accrued interest to the next interest payment date\nthereon; or\n b. If the bonds or notes are not then redeemable, the redemption price\napplicable on the first date after such purchase upon which bonds or\nnotes become subject to redemption plus accrued interest to such date.\nAll bonds or notes so purchased shall be cancelled.\n