Section 316. Exchange of bonds for obligations of city.
(a) Debt exchange.--The bonds of the authority may be issued in exchange for obligations issued by an assisted city in such manner and from time to time as may be determined by a qualified majority of the board, and the authority may pay all expenses, premiums and commissions incident to such exchange which the authority deems necessary or appropriate.
(b) Limitation.--The authority shall not exchange any of its bonds for obligations of a city unless:
(1) such city shall have entered into an intergovernmental cooperation agreement with the authority; and
(2) the authority shall have determined that the terms of such exchange will not prejudice the rights of holders of other bonds and notes of such city.
(c) Authority action.--Upon receipt of the obligations of the city so exchanged, the authority may hold such obligations and receive all payments of principal and interest thereon, or may deliver all or a portion of such obligations to the city or its fiscal agent for cancellation without receiving payment of principal or interest on such obligations, in which event the city or its fiscal agent shall cancel such obligations and the city shall have no further liability with respect thereto.