36-55.40 - Notes and bonds.
§ 36-55.40. Notes and bonds.
A. 1. HDA shall have power and is hereby authorized to issue from time totime its negotiable notes and bonds in conformity with applicable provisionsof the Uniform Commercial Code in such principal amount as HDA shalldetermine to be necessary to provide sufficient funds for achieving any ofits corporate purposes, including the payment of interest on notes and bondsof HDA, establishment of reserves to secure such notes and bonds, and allother expenditures of HDA incident to and necessary or convenient to carryout its corporate purposes and powers. In accordance with § 2.2-5002, suchpower to issue notes and bonds shall not be restricted or limited solelybecause the interest on the notes and bonds is subject, in whole or in part,directly or indirectly, to federal income taxes.
2. HDA shall have the power, from time to time, to issue (i) notes to renewnotes and (ii) bonds, to pay notes, including the interest thereon and,whenever it deems refunding expedient, to refund any bonds by the issuance ofnew bonds, whether the bonds to be refunded have or have not matured, and toissue bonds partly to refund bonds then outstanding and partly for any of itscorporate purposes. The refunding bonds may be (i) exchanged for the bonds tobe refunded or (ii) sold and the proceeds applied to the purchase, redemptionor payment of such bonds.
3. Except as may otherwise be expressly provided by HDA, every issue of itsnotes and bonds shall be general obligations of HDA payable out of anyrevenues or moneys of HDA, subject only to any agreements with the holders ofparticular notes or bonds pledging any particular revenues.
B. The notes and bonds shall be authorized by resolution or resolutions ofHDA, shall bear such date or dates and shall mature at such time or times assuch resolution or resolutions may provide, except that no bond shall maturemore than fifty years from the date of its issue. The bonds may be issued asserial bonds payable in annual installments or as term bonds or as acombination thereof. The notes and bonds shall bear interest at such rate orrates, be in such denominations, be in such form, either coupon orregistered, carry such registration privileges, be executed in such manner,be payable in such medium of payment, at such place or places, and be subjectto such terms of redemption as such resolution or resolutions may provide.The notes and bonds of HDA may be sold by HDA, at public or private sale, atsuch price or prices as HDA shall determine.
C. Any resolution or resolutions authorizing any notes or bonds or any issuethereof may contain provisions, which shall be a part of the contract orcontracts with the holders thereof, as to:
1. Pledging all or any part of the revenues to secure the payment of thenotes or bonds or of any issue thereof, subject to such agreements withnoteholders or bondholders as may then exist;
2. Pledging all or any part of the assets of HDA, including mortgages andobligations securing the same, to secure the payment of the notes or bonds orof any issue of notes or bonds, subject to such agreements with noteholdersor bondholders as may then exist;
3. The use and disposition of the gross income from mortgages owned by HDAand payment of principal of mortgages owned by HDA;
4. The setting aside of reserves or sinking funds and the regulation anddisposition thereof;
5. Limitations on the purpose to which the proceeds of sale of notes or bondsmay be applied and pledging such proceeds to secure the payment of the notesor bonds or of any issue thereof;
6. Limitations on the issuance of additional notes or bonds; the terms uponwhich additional notes or bonds may be issued and secured; and the refundingof outstanding or other notes or bonds;
7. The procedure, if any, by which the terms of any contract with noteholdersor bondholders may be amended or abrogated, the amount of notes or bonds theholders of which must consent thereto; and the manner in which such consentmay be given;
8. Limitations on the amount of moneys to be expended by HDA for operatingexpenses of HDA;
9. Vesting in a trustee or trustees such property, rights, powers and dutiesin trust as HDA may determine, which may include any or all of the rights,powers and duties of the trustee appointed by the bondholders pursuant tothis chapter and limiting or abrogating the right of the bondholders toappoint a trustee under this chapter or limiting the rights, powers andduties of such trustee;
10. Defining the acts or omissions to act which shall constitute a default inthe obligations and duties of HDA to the holders of the notes or bonds andproviding for the rights and remedies of the holders of the notes or bonds inthe event of such default, including as a matter of right the appointment ofa receiver; provided, however, that such rights and remedies shall not beinconsistent with the general laws of the Commonwealth and the otherprovisions of this chapter;
11. Any other matters, of like or different character, which in any wayaffect the security or protection of the holders of the notes or bonds.
D. Any pledge made by HDA shall be valid and binding from the time when thepledge is made; HDA's interest, then existing or thereafter obtained, in therevenues, moneys, mortgage loans, receivables, contract rights or otherproperty or proceeds so pledged shall immediately be subject to the lien ofsuch pledge without any physical delivery or further act, and the lien ofsuch pledge shall be valid and binding as against all parties having claimsof any kind in tort, contract or otherwise against HDA, irrespective ofwhether such parties have notice thereof. Neither the resolution nor anyother instrument by which a pledge is created need be recorded, nor shall anyfiling be required with respect thereto.
E. Neither the commissioners of HDA nor any other person executing such notesor bonds shall be subject to any personal liability or accountability byreason of the issuance thereof.
F. HDA, subject to such agreements with noteholders or bondholders as maythen exist, shall have power out of any funds available therefor to purchasenotes or bonds of HDA, which shall thereupon be cancelled unless HDA shallprovide written notification to the trustee pursuant to subsection J, at aprice not exceeding:
1. If the notes or bonds are then redeemable, the redemption price thenapplicable plus accrued interest to the next interest payment thereon, or
2. If the notes or bonds are not then redeemable, the redemption priceapplicable on the first date after such purchase upon which the notes orbonds become subject to redemption plus accrued interest to such date.
G. In the discretion of HDA, the bonds may be secured by a trust indenture byand between HDA and a corporate trustee, which may be any trust company orbank having the power of a trust company within or without the Commonwealth.Such trust indenture may contain such provisions for protecting and enforcingthe rights and remedies of the bondholders as may be reasonable and properand not in violation of law, including covenants setting forth the duties ofHDA in relation to the exercise of its corporate powers and the custody,safeguarding and application of all moneys. HDA may provide by such trustindenture for the payment of the proceeds of the bonds and the revenues tothe trustee under such trust indenture or other depository, and for themethod of disbursement thereof, with such safeguards and restrictions as itmay determine. All expenses incurred in carrying out such trust indenture maybe treated as a part of the operating expenses of HDA. If the bonds shall besecured by a trust indenture, the bondholders shall have no authority toappoint a separate trustee to represent them.
H. Whether or not the notes and bonds are of such form and character as to benegotiable instruments under the terms of the Uniform Commercial Code, thenotes and bonds are hereby made negotiable instruments within the meaning ofand for all the purposes of the Uniform Commercial Code, subject only to theprovisions of the notes and bonds for registration.
I. In case any of the commissioners or officers of HDA whose signaturesappear on any notes or bonds or coupons shall cease to be such commissionersor officers before the delivery of such notes or bonds, such signaturesshall, nevertheless, be valid and sufficient for all purposes, the same as ifsuch commissioners or officers had remained in office until such delivery.
J. Notwithstanding any statute or case law to the contrary, the purchase oractual or constructive ownership by HDA of any of its notes or bonds with theintent that such notes or bonds remain outstanding, as evidenced by writtennotification from HDA to the trustee under the resolution or trust indenture,shall not cause such notes or bonds or the indebtedness evidenced thereby tobe canceled or extinguished, subject to such terms and conditions as may beset forth in the written notification and except as may be otherwise providedin the resolution or trust indenture.
(1972, c. 830; 1978, c. 189; 1996, c. 298; 1998, c. 442.)