* § 10-a. Covenants, authorizations to agree and remedies. 1. In the
event that after the date on which the provisions of this act become
operative, any notes or bonds are issued by the city prior to July 1,
2025, or any bonds are issued by a state financing agency, the state of
New York hereby authorizes the city and authorizes and requires such
state financing agency to include a pledge and agreement of the state of
New York in any agreement made by the city or such state financing
agency with holders or guarantors of such notes or bonds that the state
will not take any action which will (a) substantially impair the
authority of the board during a control period, as defined in
subdivision twelve of section two of this act as in effect on the date
such notes or bonds are issued (i) to approve, disapprove, or modify any
financial plan or financial plan modification, including the revenue
projections (or any item thereof) contained therein, subject to the
standards set forth in paragraphs a, c, d, e and f of subdivision one of
section eight of this act as in effect on the date such notes or bonds
are issued and paragraph b of such subdivision as in effect from time to
time, (ii) to disapprove a contract of the city or a covered
organization if the performance of such contract would be inconsistent
with the financial plan or to approve or disapprove proposed short-term
or long-term borrowing of the city or a covered organization or any
agreement or other arrangement referred to in subdivision four of
section seven of this act, or (iii) to establish and adopt procedures
with respect to the deposit in and disbursement from the board fund of
city revenues; (b) substantially impair the authority of the board to
review financial plans, financial plan modifications, contracts of the
city or the covered organizations and proposed short-term or long-term
borrowings of the city and the covered organizations; (c) substantially
impair the independent maintenance of a separate fund for the payment of
debt service on bonds and notes of the city; (d) alter the composition
of the board so that the majority of the voting members of the board are
not officials of the state of New York elected in a state-wide election
or appointees of the governor; (e) terminate the existence of the board
prior to the time to be determined in accordance with section thirteen
of this act as in effect on the date such notes or bonds are issued; (f)
substantially modify the requirement that the city's financial
statements be audited by a nationally recognized independent certified
public accounting firm or consortium of firms and that a report on such
audit be furnished to the board; or (g) alter the definition of a
control period set forth in subdivision twelve of section two of this
act, as in effect on the date such notes or bonds are issued, or
substantially alter the authority of the board, as set forth in said
subdivision to reimpose or terminate a control period; provided,
however, that the foregoing pledge and agreement shall be of no further
force and effect if at any time (i) there is on deposit in a separate
trust account with a bank, trust company or other fiduciary sufficient
moneys or direct obligations of the United States or obligations
guaranteed by the United States, the principal of and/or interest on
which will provide moneys to pay punctually when due at maturity or
prior to maturity by redemption, in accordance with their terms, all
principal of and interest on all outstanding notes and bonds of the city
or such state financing agency containing this pledge and agreement and
irrevocable instructions from the city or such state financing agency to
such bank, trust company or other fiduciary for such payment of such
principal and interest with such moneys shall have been given, or (ii)
such notes and bonds, together with interest thereon, have been paid in
full at maturity or have otherwise been refunded, redeemed, defeased, or
discharged; and provided further that the foregoing pledge and agreement
shall be of full force and effect upon its inclusion in any agreement
made by the city or state financing agency with holders or guarantors of
such notes or bonds.

Upon payment for such obligations issued pursuant to this act by the
original and all subsequent holders inclusion of the foregoing covenant
shall be deemed conclusive evidence of valuable consideration received
by the state and city for such covenant and of reliance upon such pledge
and agreement by any such holder. The state hereby grants any such
benefited holder the right to sue the state in a court of competent
jurisdiction and enforce this covenant and agreement and waives all
rights of defense based on sovereign immunity in such an action or suit.

2. Every such bond or note which shall contain the pledge and
agreement referred to in subdivision one above shall be callable for
redemption commencing not later than the eleventh anniversary of its
date of issuance and shall contain on its face a recital to such effect,
together with the terms and conditions under which such obligation may
be redeemed.

3. The finance board of the city is hereby authorized to enter into
agreements and to make covenants with any purchaser, holder or guarantor
of obligations issued by the city or by a state financing agency to
protect and safeguard the security and rights of a purchaser, holder or
guarantor or to protect and safeguard the source of payment of such
obligations or as deemed appropriate by the finance board which
agreements or covenants may contain provisions providing for (a) (i) the
compliance by the city with any of the provisions of this act or of the
New York City Loan Guaranty Act of nineteen hundred seventy-eight,
Public Law 95-339, or, (ii) in any agreements with the guarantor of such
obligations but only in such agreements unless otherwise authorized by
law, the compliance with any of the terms and conditions required by the
secretary of the treasury pursuant to such act, (b) restrictions on the
issuance by the city of its obligations, limitations on the inclusion of
expense items in its capital budgets and financial records, reporting
and disclosure requirements in addition to any such restrictions,
limitations or requirements contained in this act, (c) compliance by the
city with its financial plan as modified from time to time, (d)
conditions that would give rise to an event of default on such
obligations, and (e) remedies available to a purchaser, holder or
guarantor of such obligations, other than acceleration or the required
elimination or reduction of specific municipal expenditures, including
the circumstances, if any, under which a trustee or trustees or a fiscal
agent may be appointed or may act as a representative of holders of
obligations issued by the city in connection with an issue or issues of
obligations of the city and the rights, powers and duties which may be
vested in such trustee, trustees or fiscal agent as such representative.
The state of New York hereby pledges and agrees that it will take no
action that would impair the power of the city to comply with or to
perform any covenant or agreement made pursuant to this subdivision, or
any right or remedy of a purchaser, holder or guarantor to enforce such
covenant or agreement; and the city or a state financing agency is
hereby authorized to include such pledge and agreement in any agreement
made pursuant to this subdivision. Nothing contained in this subdivision
shall preclude the state from authorizing the city to exercise, or the
city from exercising, any power provided by law to seek application of
laws then in effect under the bankruptcy provisions of the United States
constitution or shall preclude the state from validly exercising its
police powers.

4. Notwithstanding any other provision of law, the trustees of any
retirement, pension or annuity fund or system of the state of New York
or of the city of New York are hereby authorized to enter into
commitments to purchase and to purchase notes, bonds or other
obligations of the city of New York or of a state financing agency, the
payment in whole or in part, of interest, principal, or both, is
guaranteed by the secretary of the Treasury of the United States of
America pursuant to the New York City Loan Guarantee Act of 1978, Public
Law 95-339, as presently in effect or hereafter amended or to purchase
other bonds or notes of such city or of a state financing agency prior
to June thirtieth, nineteen hundred eighty-two, or in the case of the
trustees of any retirement, pension or annuity fund or system of the
city of New York, to enter into commitments to purchase such other bonds
or notes of such city or of a state financing agency prior to June
thirtieth, nineteen hundred eighty-two. Such commitments to purchase
shall be binding upon and enforceable against successor trustees of such
retirement, pension or annuity funds or systems of the state of New York
or city of New York.

5. The secretary of the treasury shall have the right to initiate a
proceeding in the supreme court of the state of New York in and for the
county of New York or the court of claims of the state of New York to
obtain a court order or other relief in connection with any agreements
or other transactions entered into by the secretary relative to his
guarantee of the principal, interest, or both of city indebtedness.

6. Notwithstanding any other provision of law to the contrary, the
governor shall have the authority in connection with any agreement by
the federal government or any agency or instrumentality thereof to
guarantee the payment of the principal of or interest on bonds or notes
issued by the city of New York or by a state financing agency, to enter
into one or more agreements containing terms and conditions required by
the secretary of the treasury pursuant to the New York City Loan
Guarantee Act of 1978, Public Law 95-339, approved by the comptroller
and approved as to form by the attorney general, with the federal
government or any agency or instrumentality thereof with respect to such
guarantee or any matters related thereto and to comply with such terms
and conditions.

7. Nothing in this section contained shall preclude the state from
authorizing the board or the city to exercise, or the board or city from
exercising, any power provided by law to seek application of laws then
in effect under the bankruptcy provisions of the United States
constitution or to preclude the state from a further exercise of its
powers under article eight, section twelve, of the state constitution.

* Terminates July 1, 2008 or ... see § 13