Section 6 - Bonds of the corporation1.(i) The corporation shall have power and is hereby authorized from time to time to issue its bonds in an aggregate principal amount not exceeding four billion, two hundred million dollars ($4,200,000,000) plus the amount of any financing costs, to provide sufficient funds for achieving its corporate purpose, consisting of the purchase of all or a portion of the state's share pursuant to section four of this act and the payment or provision for financing costs. The foregoing limitation shall not apply to bonds issued to refund bonds. Provided, however, that no bonds may be issued pursuant to the authority and power granted by this section, except an issue of bonds in an amount not to exceed seven hundred million dollars ($700,000,000) plus the amount of any applicable financing costs, until the state comptroller shall determine that legislative passage of the budget has occurred for the current state fiscal year in accordance with the provisions of subdivision 3 of section 5 of the legislative law. Provided, further, no bonds, other than refunding bonds, shall be issued pursuant to such authority and power on or after July 1, 2004. (ii) Each issuance of bonds shall be authorized by a resolution of the corporation, adopted by a majority of the members of the board then in office without further authorization or approval, provided, however, that any such resolution authorizing the issuance of bonds may delegate to an officer of the corporation the power to issue such bonds from time to time and to fix the details of any such issues of bonds by an appropriate certificate of such authorized officer. Every issue of the bonds of the corporation shall be special revenue obligations payable from and secured by a pledge of pledged tobacco revenues and other assets, including those proceeds of such bonds deposited in a reserve fund for the benefit of bondholders, earnings on funds of the corporation and such other funds and assets as may become available, upon such terms and conditions as approved by the state representative and as specified by the corporation in the resolution under which the bonds are issued or in a related trust indenture.(iii) The corporation shall have the power and is hereby authorized from time to time to issue bonds, whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund bonds then outstanding and partly for any of its other corporate purposes. The refunding bonds may be exchanged for the bonds to be refunded or sold and the proceeds applied to the purchase, redemption or payment of such bonds. 2.The bonds of the corporation of each issue shall be dated, shall bear interest (which, under the code, in the opinion of transaction counsel to the corporation, may be includable in or excludable from the gross income of the owners for federal income tax purposes) at such fixed or variable rates, payable at or prior to maturity, and shall mature at such time or times, as may be determined by the corporation and may be made redeemable before maturity, at the option of the corporation, at such price or prices and under such terms and conditions as may be fixed by the corporation. The principal and interest of such bonds may be made payable in any lawful medium. The resolution or the certificate of the authorized officer shall determine the form of the bonds, either registered or book-entry form, and the manner of execution of the bonds and shall fix the denomination or denominations of the bonds and the place or places of payment of principal and interest thereof, which may be at any bank or trust company within or outside the state. If any officer whose signature or a facsimile thereof appears on any bonds shall cease to be such officer before the delivery of such bonds, such signature or facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. The corporation may also provide for temporary bonds and for the replacement of any bond that shall become mutilated or shall be destroyed or lost.3.The corporation with the approval of the state representative may sell such bonds in such manner, either at a public or private sale and either on a competitive or negotiated basis. Provided, however, no such bonds may be sold by the corporation at private sale unless such sale and the terms thereof have been approved in writing by the comptroller. The proceeds of such bonds shall be disbursed for the purposes for which such bonds were issued under such restrictions as the sale agreement and the resolution authorizing the issuance of such bonds or the related trust indenture may provide. Such bonds shall be issued upon approval of both the state representative and the corporation and without any other approvals, filings, proceedings or the happening of any other conditions or things other than the approvals, findings, proceedings, conditions, and things that are specified and required by this act.4.Any pledge made by the corporation shall be valid and binding at the time the pledge is made. The assets, property, revenues, reserves or earnings so pledged shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the corporation, irrespective of whether such parties have notice thereof. Notwithstanding any other provision of law to the contrary, neither the bond resolution nor any indenture or other instrument by which a pledge is created or by which the corporation's interest in pledged assets, property, revenues, reserves or earnings thereon is assigned need be filed, perfected or recorded in any public records in order to protect the pledge thereof or perfect the lien thereof as against third parties, except that a copy thereof shall be filed in the records of the corporation. 5.Whether or not the bonds of the corporation are of such form and character as to be negotiable instruments under the terms of the uniform commercial code, the bonds are hereby made negotiable instruments for all purposes, subject only to the provisions of the bonds for registration.6.At the sole discretion of the corporation, any bonds issued by the corporation and any ancillary bond facility made under the provisions of this act may be secured by a resolution or trust indenture by and between the corporation and the trust indenture trustee, which may be any trust company or bank having the powers of a trust company, whether located within or outside the state. Such trust indenture or resolution providing for the issuance of such bonds may provide for the creation and maintenance of such reserves as the board shall determine to be proper and may include covenants setting forth the duties of the corporation in relation to the bonds, the income of the corporation, the related sale agreement with respect to the sale of the state's share and the pledged tobacco revenues and other assets. Such trust indenture or resolution may contain provisions respecting the custody, safeguarding and application of all moneys and securities, may contain such provisions for protecting and enforcing the rights and remedies (pursuant thereto and to the sale agreement) of the owners of the bonds and any other benefitted party as may be reasonable and proper and not in violation of law and may include any or all of the rights, powers and duties of the trustee appointed by bondholders pursuant to section eight of this act and limiting or abrogating the right of the bondholders to appoint a trustee under such section. It shall be lawful for any bank or trust company incorporated under the laws of the state which may act as depository of the proceeds of bonds or of any other funds or obligations received on behalf of the corporation to furnish such indemnifying bonds or to pledge such securities as may be required by the corporation. Any such trust indenture or resolution may contain such other provisions as the corporation may deem reasonable and proper for priorities and subordination among the owners of the bonds and other beneficiaries. Any reference in this act to a resolution of the board shall include any trust indenture authorized thereby.7.The corporation may enter into, amend or terminate, as it determines to be necessary or appropriate, any ancillary bond facility (i) to facilitate the issuance, sale, resale, purchase, repurchase or payment of bonds, interest rate savings or market diversification or the making or performance of swap contracts, including without limitation bond insurance, letters of credit and liquidity facilities, or (ii) to attempt to manage or hedge risk or achieve a desirable effective interest rate or cash flow. Such facility shall be made upon the terms and conditions established by the board, including without limitation provisions as to security, default, termination, payment, remedy and consent to service of process.8.The corporation may enter into, amend or terminate, any ancillary bond facility that it determines to be necessary or appropriate to place the obligations or investments of the corporation, as represented by the bonds or the investment of reserved bond proceeds or other pledged tobacco revenues or other assets, in whole or in part, on the interest rate, cash flow or other basis approved by the corporation, which facility may include without limitation contracts commonly known as interest rate swap agreements, forward purchase contracts or guaranteed investment contracts and futures or contracts providing for payments based on levels of, or changes in, interest rates. These contracts or arrangements may be entered into by the corporation in connection with, or incidental to, entering into, or maintaining any (i) agreement which secures bonds of the corporation or (ii) investment, or contract providing for investment of reserves or similar facility guaranteeing an investment rate for a period of years not to exceed the underlying term of the bonds. The determination by the corporation that an ancillary bond facility or the amendment or termination thereof is necessary or appropriate as aforesaid shall be conclusive. Any ancillary bond facility may contain such payment, security, default, remedy, termination provisions and payments and other terms and conditions as determined by the corporation, after giving due consideration to the creditworthiness of the counterparty or other obligated party, including any rating by any nationally recognized rating agency, and any other criteria as may be appropriate. 9.Bonds or any ancillary bond facility may contain a recital that they are issued or executed, respectively, pursuant to this act, which recital shall be conclusive evidence of their validity, respectively, and the regularity of the proceedings relating thereto.10.The corporation, subject to such agreements with bondholders as may then exist (including provisions which restrict the power of the corporation to purchase bonds), or with the providers of any applicable ancillary bond facility, shall have the power out of any funds available therefor to purchase bonds of the corporation, which may or may not thereupon be cancelled, at a price not substantially exceeding:(i) if the bonds are then redeemable, the redemption price then applicable, including any accrued interest; and(ii) if the bonds are not then redeemable, the redemption price and accrued interest applicable on the first date after such purchase upon which the bonds become subject to redemption.11.(i) Notwithstanding the provisions of any general or special law to the contrary, and subject to the making of annual appropriations therefor by the state, in order to assist in the undertaking and financing by the corporation under this act, the state representative is authorized to and shall enter into one or more contingency contracts with the corporation upon such terms as the corporation and the state representative shall agree, so as to provide annually to the corporation the amount, if any, as necessary to meet the debt service requirements on one or more series of bonds, including refunding bonds, in any year if the receipts from pledged tobacco revenues or from an ancillary bond facility, if any, are inadequate and after application of all collateral pledged therefor, including any debt service and debt service reserve fund. Any contingency contract shall terminate when there are no bonds benefited by the contract outstanding in accordance with the trust indenture under which such bonds are issued. The contract may provide for (A) the corporation to request annually, not later than sixty days prior to the commencement of the state's next succeeding fiscal year, from the state the amount, as shall be certified by an authorized officer of the corporation to the director of the budget, to be provided by the state during its next succeeding fiscal year pursuant to each contingency contract, and (B) for the director of the budget on behalf of the state to include, as a requested appropriation item, an amount equal to such certified amount. Each contingency contract shall include text to the effect that the obligations of the state thereunder shall be deemed executory only to the extent of the moneys available to the state and no liability on account of any such agreement shall be incurred by the state beyond the moneys available and appropriated for the purpose thereof. (ii) The state, through the state representative, is hereby authorized to enter into a contingency contract on the terms and conditions and subject to the limitations of this section, it being hereby determined that the additional net proceeds to be received as a result thereof by the state are an important public purpose to be achieved. The obligation of the state to fund or to pay the amounts provided for in the contingency contract, as in this section provided, shall constitute a contingent contractual obligation and shall not constitute a debt or state supported debt of the state within the meaning of any constitutional or statutory provision and shall be deemed executory only to the extent of moneys available; no liability shall be incurred by the state beyond the moneys available for such purpose and such obligation is subject to annual appropriation by the legislature. The amounts paid to the corporation pursuant to any such contract shall be used by it solely to pay or provide for the payment of debt service on the bonds of the corporation, including refunding bonds, if any.12.Neither the members of the corporation nor any other person executing the bonds or an ancillary bond facility of the corporation shall be subject to any personal liability or accountability by reason of the issuance or execution and delivery thereof.N.Y. Tobacco Settlement Financing Corporation Act § 6