July (pdf) - New York Power Authority

(General Resolution, Secs. 801, 802, and 902)
Event of Default; Remedies Upon Default
Pursuant to the General Resolution, any of the following events set forth in clauses (i) through (v)
constitutes an ‘‘Event of Default’’ if the Authority defaults (i) in the payment of principal or Redemption
Price of any Obligation, or (ii) in the payment of interest thereon and such default continues for 30 days,
or (iii) in the performance or observance of any other covenant, agreement or condition in the General
Resolution or the Obligations, and such default continues for 60 days after written notice thereof,
provided, however, that if such default shall be such that it cannot be corrected within such 60 day period, it
shall not constitute an Event of Default if corrective action is instituted within such period and diligently
pursued until the failure is corrected, or (iv) if the Authority (1) files a petition seeking a composition of
indebtedness under the Federal bankruptcy laws, or any other applicable law or statute of the United States of
America or of the State; (2) consents to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or other similar official of the Authority or any substantial
portion of its property; (3) makes any assignment for the benefit of creditors; (4) admits in writing its
inability generally to pay its debts generally as they become due; or (5) takes action in furtherance of any
of the foregoing or (v) if (1) a decree or order for relief is entered by a court having jurisdiction of the
Authority adjudging the Authority a bankrupt or insolvent or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the Authority in an involuntary case
under the Federal bankruptcy laws, or under any other applicable law or statute of the United States of
America or of the State; (2) a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar
official of the Authority or of any substantial portion of its property is appointed; or (3) the winding up or
liquidation of its affairs is ordered and the continuance of any such decree or order remains unstayed and in
effect for a period of sixty (60) consecutive days. Upon an Event of Default, the Trustee or the Owners of
25% in principal amount of the Obligations then Outstanding may declare the principal and accrued
interest on the Obligations then Outstanding due and payable immediately, subject, however, to rescission
of such declaration and annulment of the default upon the remedying thereof.
Under the General Resolution, the Authority covenants that upon a default the books of record of the
Authority and all other records relating to all projects and facilities of the Authority will be subject to the
inspection and use by the Trustee, and that the Authority will, upon demand by the Trustee, account
for the Trust Estate under the General Resolution as if the Authority were the trustee of an express trust.
Upon a default, the Trustee may protect and enforce its and the Owners’ rights under the General
Resolution by a suit in equity or at law, whether for the specific performance of any covenant contained in the
General Resolution, or in aid of execution of any power granted therein or for an accounting against the
Authority as if it were the trustee of an express trust, or in the enforcement of any other legal or equitable right
as the Trustee deems most effectual to enforce its rights or perform its duties under the General Resolution.
No Owner has any right to institute suit to enforce any provision of the General Resolution or the
execution of any trust thereunder or for any remedy thereunder, unless the Trustee has been requested by at
least 25% of the Owners, and such Owners shall have offered the Trustee adequate security against expenses
and liabilities to be incurred therein, and the Trustee has failed to commence such suit in the manner
provided in the General Resolution.
(General Resolution, Art. X)
Defeasance
Outstanding Obligations or any portion thereof shall, prior to the maturity or redemption date thereof,
be deemed to have been paid pursuant to the General Resolution and shall cease to be entitled to any lien,
benefit or security under the General Resolution if the following conditions are met: (i) in the case of
Obligations to be redeemed, the Authority shall have given to the Trustee irrevocable instructions to mail
the notice of redemption therefor, (ii) there shall have been irrevocably deposited with the Trustee in trust
either moneys in an amount which shall be sufficient, or Defeasance Security, the principal of and the
App. 1-12