40:62-133.8. Appointment of trustee in event of default
a. If a default occurs in the payment of the principal of or interest on any bonds of the series after the bonds are due, whether at maturity or upon call for redemption, and this default continues for a period of 30 days, or if the commission fails or refuses to comply with the provisions of this amendatory and supplementary act or fails or refuses to carry out and perform the terms of any contract with the holders of the bonds, and this failure or refusal continues for a period of 30 days after written notice to the commission of its existence and nature, the holders of 25% in the aggregate principal amount of the bonds and the series 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 the bonds of the series for the purposes provided in this section. This section shall be applicable only if the bond resolution of the commission authorizing the issuance of a series of its bonds provides that the holders of the bonds of the series are entitled to the benefits of this section.
b. The trustee may, and upon written request of the holders of 25% in aggregate principal amount of the bonds of the series then outstanding shall, in his or its own name:
(1) By any action, writ, proceeding in lieu of prerogative writ, or other proceeding, enforce all rights of the holders of the bonds, including the right to require the commission to charge and collect water rents adequate to carry out any contract as to, or pledge of, water revenues, and to require the commission to carry out and perform the terms of any contract with the holders of the bonds or its duties under this amendatory and supplementary act;
(2) Bring an action upon all or any part of the bonds or interest coupons or claims appurtenant thereto;
(3) By action, require the commission to account as if it were the trustee of an express trust for the holders of the bonds;
(4) By action, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of the bonds; or
(5) Declare the bonds due and payable, whether or not in advance of maturity, upon 30 days' prior notice in writing to the commission and, if all defaults are satisfied, with the consent of the holders of 25% of the principal amount of the bonds then outstanding, annul the declaration and its consequences.
c. The trustee shall 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 the bonds of the series in the enforcement and protection of their rights.
d. In any action or proceeding by the trustee, the fees, counsel fees and expenses of the trustee and of the receiver, if any, appointed pursuant to this amendatory and supplementary act, shall constitute taxable costs and disbursements, and all costs and disbursements, allowed by the court, shall be a first charge upon any water rents and water revenues of the commission pledged for the payment or security of bonds of the series.
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Last modified: October 11, 2016