40A:10-38.10. Appointment of trustee, duties, powers, fees

10. a. If the bond resolution of a joint insurance fund authorizing or providing for the issuance of a series of bonds provides in substance that the holders of the bonds in the series shall be entitled to the benefits of this section, then in the event that there is a default in the payment of principal of or interest on any bonds of the series after the same becomes 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 joint insurance fund fails or refuses to carry out and perform the terms of a contract with the holders the bonds, and the failure or refusal continues for a period of 30 days after written notice to the joint insurance fund of its existence and nature, the holders of 25 percent in aggregate principal amount of the bonds of the series then outstanding by instrument or instruments filed in the Office of the Secretary of State and proved and 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 purpose provided in this section.

b. The trustee may and upon written request of the holders of 25 percent in aggregate principal amount of the bonds of the series then outstanding shall, in the trustee's 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 joint insurance fund to charge and collect assessments adequate to carry out a contract as to, or pledge of, moneys of the fund, and to require the fund to carry out and perform the terms of a contract with the holders of the bonds or its duties under this 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 joint insurance fund 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 all the bonds due and payable, whether or not in advance of maturity, upon 30 days' prior notice in writing to the joint insurance fund and, if all defaults shall be made good, then with the consent of the holders of 25 percent of the principal amount of the bonds then outstanding, annul the 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 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 act, shall constitute taxable costs and disbursements, and all costs and disbursements allowed by the court shall be a first charge upon any assessments and moneys of the joint insurance fund pledged for the payment or security of bonds of the series.

L.1993,c.269,s.10.