§ 655 — Notes and bonds of the corporation

§ 655. Notes and bonds of the corporation. 1. (a) Subject to the\nprovisions of section six hundred fifty-six of this article, the\ncorporation shall have power and is hereby authorized to issue from time\nto time its negotiable notes and bonds in conformity with applicable\nprovisions of the uniform commercial code in such principal amount as\nthe corporation shall determine to be necessary to provide sufficient\nfunds for achieving its corporate purposes, including the making of\nmortgage loans, the payment of interest on notes and bonds of the\ncorporation, the establishment of reserves to secure such notes and\nbonds, and the payment of all operating expenses of the corporation\nincident to or necessary or convenient to carry out its corporate\npurposes and powers.\n (b) The corporation shall have the power, from time to time, to issue\n(i) notes to renew notes and (ii) bonds to pay notes, including the\ninterest thereon and, whenever it deems refunding expedient, to refund\nany bonds by the issuance of new bonds, whether the bonds to be refunded\nhave or have not matured, and to issue bonds partly to refund bonds then\noutstanding and partly for any of its corporate purposes. The refunding\nbonds may be exchanged for the bonds to be refunded or sold and the\nproceeds applied to the purchase, redemption or payment of such bonds.\n (c) Except as may otherwise be expressly provided by the corporation,\nevery issue of its notes and bonds shall be general obligations of the\ncorporation payable out of any revenues of the corporation, subject only\nto any agreements with the holders of particular notes or bonds pledging\nany particular revenues.\n 2. The notes and bonds shall be authorized by resolution or\nresolutions of the corporation, shall bear such date or dates and shall\nmature at such time or times as such resolution or resolutions may\nprovide, except that no note or any renewal thereof shall mature more\nthan five years, and in the case of any note or any renewal thereof\nissued for the purposes of making mortgage loans shall mature more than\nnine years, after the date of issue of the original note and no bond\nshall mature more than fifty years from the date of its issue. The\nbonds may be issued as serial bonds payable in annual installments or as\nterm bonds or as a combination thereof. The notes and bonds 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. The notes and bonds may be sold\nby the corporation at public or private sale, at such price or prices as\nthe corporation shall determine; provided, however, that the corporation\nshall consult with the comptroller as to the timing of any sale; and\nprovided further that no notes or bonds of the corporation may be sold\nat a private sale unless such sale and the terms thereof have been\napproved in writing by (a) the comptroller, where such sale is not to\nthe comptroller, or (b) the director of the budget, where such sale is\nto the comptroller.\n 3. Any resolution or resolutions authorizing any notes or bonds or any\nissue thereof may contain provisions, which shall be a part of the\ncontract or contracts with the holders thereof, as to:\n (a) pledging all or any part of the revenues to secure the payment of\nthe notes or bonds or of any issue thereof, subject to such agreements\nwith noteholders or bondholders as may then exist;\n (b) pledging all or any part of the assets of the corporation,\nincluding mortgages and obligations securing the same, to secure the\npayment of the notes or bonds or of any issue of notes or bonds, subject\nto such agreements with noteholders or bondholders as may then exist;\n (c) the use and disposition of the gross income from mortgages owned\nby the corporation and payment of principal of mortgages owned by the\ncorporation;\n (d) the setting aside of reserves or sinking funds and the regulation\nand disposition thereof;\n (e) limitations on the purpose to which the proceeds of sale of notes\nor bonds may be applied and pledging such proceeds to secure the payment\nof the notes or bonds or of any issue thereof;\n (f) limitations on the issuance of additional notes or bonds; the\nterms upon which additional notes or bonds may be issued and secured;\nand the refunding of outstanding or other notes or bonds;\n (g) the procedure, if any, by which the terms of any contract with\nnoteholders or bondholders may be amended or abrogated, the amount of\nnotes or bonds the holders of which must consent thereto, and the manner\nin which such consent may be given;\n (h) limitations on the amount of moneys to be expended by the\ncorporation for operating expenses of the corporation;\n (i) vesting in a trustee or trustees such property, rights, powers and\nduties in trust as the corporation may determine, which may include any\nor all of the rights, powers and duties of the trustee appointed by the\nbondholders pursuant to this article, and limiting or abrogating the\nright of the bondholders to appoint a trustee under this article or\nlimiting the rights, powers and duties of such trustee;\n (j) the acts or omissions to act which shall constitute a default in\nthe obligations and duties of the corporation to the holders of the\nnotes or bonds and providing for the rights and remedies of the holders\nof the notes or bonds in the event of such default, including the right\nto appointment of a receiver; providing, however, that such rights and\nremedies shall not be inconsistent with the general laws of the state\nand the other provisions of this article;\n (k) any other matters, of like or different character, which in any\nway affect the security or protection of the holders of the notes or\nbonds.\n 3-a. Any resolution or resolutions authorizing any notes or bonds or\nany issue thereof shall contain provisions, which shall be a part of the\ncontract or contracts with the holders thereof, ensuring that no\nmortgage loan shall be made by the corporation from the proceeds of such\nnotes or bonds or issue thereof unless the estimated revenues from the\nmortgaged property, including any subsidies, shall be sufficient in\namount to secure repayment of the loan and the interest thereon and to\npay all other necessary expenses of the mortgagor relating to such\nproperty.\n 4. Any pledge made by the corporation shall be valid and binding from\nthe time when the pledge is made; the revenues or property so pledged\nand thereafter received by the corporation shall immediately be subject\nto the lien of such pledge without any physical delivery thereof or\nfurther act, and the lien of any such pledge shall be valid and binding\nas against all parties having claims of any kind in tort, contract or\notherwise against the corporation, irrespective of whether such parties\nhave notice thereof. Neither the resolution nor any other instrument by\nwhich a pledge is created need be recorded.\n 5. Neither the members of the corporation nor any other person\nexecuting such notes or bonds shall be subject to any personal liability\nor accountability by reason of the issuance thereof.\n 6. The corporation, subject to such agreements with noteholders or\nbondholders as may then exist, shall have power out of any funds\navailable therefor, to purchase notes or bonds of the corporation, which\nshall thereupon be cancelled, at a price not exceeding\n (a) if the notes or bonds are then redeemable, the redemption price\nthen applicable plus accrued interest to the next interest payment date\nthereon, or\n (b) if the notes or bonds are not then redeemable, the redemption\nprice applicable on the first date after such purchase upon which the\nnotes or bonds become subject to redemption plus accrued interest to\nsuch date.\n 7. In the discretion of the corporation, the bonds may be secured by a\ntrust indenture by and between the corporation and a corporate trustee,\nwhich may be any trust company or bank having the powers of a trust\ncompany in the state. Such trust indenture may contain such provisions\nfor protecting and enforcing the rights and remedies of the bondholders\nas may be reasonable and proper and not in violation of law, including\ncovenants setting forth the duties of the corporation in relation to the\nexercise of its corporate powers and the custody, safeguarding and\napplication of all moneys. The corporation may provide by such trust\nindenture for the payment of the proceeds of the bonds and the revenues\nto the trustee under such trust indenture or other depository, and for\nthe method of disbursement thereof, with such safeguards and\nrestrictions as it may determine. All expenses incurred in carrying out\nsuch trust indenture may be treated as a part of the operating expenses\nof the corporation. If the bonds shall be secured by a trust indenture,\nthe bondholders shall have no authority to appoint a separate trustee to\nrepresent them.\n 8. Whether or not the notes and bonds are of such form and character\nas to be negotiable instruments under the terms of the uniform\ncommercial code, the notes and bonds are hereby made negotiable\ninstruments within the meaning of and for all the purposes of the\nuniform commercial code, subject only to the provisions of the notes and\nbonds for registration.\n