Vermont § 280t - Security agreements securing borrower obligations; pledges of general revenues or project revenues

§ 280t. Security agreements securing borrower obligations; pledges of general revenues or project revenues

• (a) Governmental obligations may be secured by one or more security agreements between
  the governmental unit and a corporate trustee, which may be a trust company or bank
  having the powers of a trust company within or without the State, or directly between
  the Board and the governmental unit. A borrower obligation, other than governmental
  obligations, may be secured by one or more security agreements between the Board and
  the qualified borrower. Any security agreements entered into pursuant to this section
  shall be in such form and shall be executed as provided in the applicable loan agreement
  or as otherwise agreed to between the Board and the qualified borrower. (b) Any security agreement directly or indirectly securing governmental obligations, other
  than governmental obligations issued in accordance with this subchapter, may pledge
  or assign, and create security interests in, all or any part of the general revenues
  of the governmental unit. Any security agreement securing borrower obligations issued
  in accordance with this section may pledge or assign, and create security interests
  in, all or any part of the project revenues of the qualified borrower, but, in the
  case of a governmental unit, shall not otherwise pledge or assign any other general
  revenues of the governmental unit unless otherwise authorized by the applicable bond
  act. Any security agreement may contain such provisions for protecting and enforcing
  the rights, security, and remedies of the Board, or the holders of the borrower obligations,
  as may be determined by the Board and the qualified borrower, including provisions
  defining defaults and providing for remedies, including the acceleration of maturities,
  and: (1) in the case of borrower obligations issued under this section, the appointment of
  a receiver of the project financed thereby and the system of which it is a part; and (2) in the case of public entities, the use of a State aid intercept mechanism; and covenants
  setting forth the duties of, and limitations on, the qualified borrower in relation
  to the custody, safeguarding, investment, and application of monies, including general
  revenues and project revenues, the issue of additional and refunding borrower obligations
  and other bonds, notes, or obligations on a parity or superior thereto, the establishment
  of reserves, the establishment of sinking funds for the payment of borrower obligations,
  and the use of surplus proceeds. A security agreement securing borrower obligations
  issued in accordance with this section also may include covenants and provisions not
  in violation of law regarding the acquisition, construction, operation, and carrying
  out of the qualified project financed by such obligations, the system of which it
  is a part and any other revenue producing facilities from which the qualified borrower
  may pledge or assign any of its project revenues as appropriate, as security for payments
  made thereon. (c) Any pledge of general revenues or project revenues made by a qualified borrower shall
  be valid and binding and shall be deemed continuously perfected for the purposes of
  the State commercial code, Title 9 and Title 9A, and any other law from the time made.
  The general revenues, project revenues, monies, rights, and proceeds so pledged and
  then held or thereafter acquired or received by the qualified borrower shall immediately
  be subject to the lien of such pledge without any physical delivery or segregation
  thereof or further act, and the lien of such pledge shall be valid and binding against
  all parties having claims of any kind in tort, contract or otherwise, regardless of
  whether such parties have notice thereof. Neither the security agreement or any other
  agreement by which a pledge is created need be filed or recorded except in the records
  of the governmental unit and no filing need be made under the provisions of the State
  commercial code. (d) In the case of a governmental unit, a pledge of general revenues or project revenues
  in accordance with this subchapter shall constitute a sufficient appropriation thereof
  for the purposes of any provisions for appropriation for so long as such pledge shall
  be in effect and, notwithstanding any law to the contrary, such revenues shall be
  applied as required by the pledge and the security agreement evidencing the same without
  further appropriation. (Added 1997, No. 43, § 1.)