55:14K-22. Default in payment of principal or interest on bonds

a. If the agency defaults in the payment of principal of or interest on any issue of bonds after the same becomes due, whether at maturity or upon call for redemption, and the default continues for a period of 30 days, or if the agency fails or refuses to comply with the provisions of this act or fails or refuses to carry out and perform the terms of any contract with the holders of bonds and the failure or refusal continues for a period of 30 days after written notice to the agency of its existence and nature, the holders of 25% in aggregate principal amount of such issue of bonds then outstanding by instrument or instruments filed in the office of the Secretary of State and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the holders of those bonds for the purposes provided in this section.

b. The trustee may, and upon written request of the holders of 25% in aggregate principal amount of such bonds then outstanding shall, in the trustee's own name:

(1) by any action, writ, or other proceeding, enforce all rights of the holders of such bonds, including the right to collect and enforce the payment of principal of and interest due or becoming due on eligible loans and loans to institutional lenders and collect and enforce any collateral securing such loans or sell such collateral and the right to cause the foreclosure of any eligible mortgage loan, and to sell any property purchased at any such foreclosure, so as to carry out any contract as to, or pledge of, revenues, and to require the agency to carry out and perform the terms of any contract with the holders of such bonds or its duties under this act;

(2) bring suit upon all or any part of such bonds;

(3) by action, require the agency to account as if it were the trustee of an express trust for the holders of such bonds;

(4) by action, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of such bonds; or

(5) declare all such bonds due and payable, whether or not in advance of maturity, upon 30 days' prior notice in writing to the agency, and, if all defaults shall be made good, then with the consent of the holders of 25% of the principal amount of such bonds then outstanding, annul such declaration and its consequences.

c. The trustee shall, in addition to the foregoing, have and possess all of the powers necessary or appropriate for the exercise of the functions specifically set forth herein or incident to the general representation of the holders of bonds in the enforcement and protection of their rights.

d. In any action or proceeding by such trustee, the fees, counsel fees and expenses of the trustee, if any, appointed pursuant to this act, shall constitute taxable costs and disbursements, and all costs and disbursements, allowed by the court, shall be a first charge upon any revenues, moneys, funds or property of the agency pledged for the payment or security of such issue of bonds.

L.1983, c. 530, s. 22, eff. Jan. 17, 1984.