§ 635. Remedies of bondholders and noteholders

(a) In the event that the Agency defaults in the payment of principal or of interest on any bonds or notes issued under this chapter after they become due, whether at maturity or upon call for redemption, and the default continues for a period of 30 days, or in the event that the Agency fails or refuses to comply with the provisions of this chapter, or defaults in any agreement made with the holders of an issue of bonds or notes of the Agency, the holders of 25 percent in aggregate principal amount of the bonds or notes of such issue 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 such bonds or notes for the purposes herein provided.

(b) Such trustee may, and upon written request of the holders of 25 percent in principal amount of such bonds or notes then outstanding shall, in his or her or its own name:

(1) enforce all rights of the bondholders or noteholders, including the right to require the Agency to collect interest and amortization payments on the mortgages or other obligations held by it adequate to carry out any agreement as to, or pledge of, the interest and amortization payments, and to require the Agency to carry out any other agreements with the holders of such bonds or notes and to perform its duties under this chapter;

(2) enforce all rights of the bondholders or noteholders, including the right to collect and enforce the payment of principal of and interest due or becoming due on loans to mortgage lenders and collect and enforce any collateral securing the loans or sell the collateral, 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 notes or its duties under this chapter;

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

(4) by action or suit, require the Agency to account as if it were the trustee of an express trust for the holders of such bonds or notes;

(5) by action or suit, enjoin any acts or things that may be unlawful or in violation of the rights of the holders of such bonds or notes;

(6) declare all such bonds or notes due and payable, and, if all defaults shall be made good, then with the consent of the holders of 25 percent of the principal amount of such bonds or notes then outstanding to annul the declaration and its consequences.

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

(d) Before declaring the principal of bonds or notes due and payable, the trustee shall first give 30 days’ notice in writing to the Governor, to the Agency and to the Attorney General of the State.

(e) The Superior Courts or courts with equity jurisdiction shall have jurisdiction of any suit, action, or proceeding by the trustee on behalf of bondholders or noteholders. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974.)