                                 CODE OF VIRGINIA

MATERIAL DEFAULT; REMEDIES (§ 56-575.11)

A. In the event of a material default by the private entity, the responsible
public entity may elect to assume the responsibilities and duties of the private
entity of the qualifying project, and in such case, it shall succeed to all of
the right, title and interest in such qualifying project, subject to any liens
on revenues previously granted by the private entity to any person providing
financing thereof.

B. Any responsible public entity having the power of condemnation under state
law may exercise such power of condemnation to acquire the qualifying project in
the event of a material default by the private entity. Any person who has
provided financing for the qualifying project, and the private entity, to the
extent of its capital investment, may participate in the condemnation
proceedings with the standing of a property owner.

C. The responsible public entity may terminate, with cause, the interim or
comprehensive agreement and exercise any other rights and remedies that may be
available to it at law or in equity.

D. The responsible public entity may make or cause to be made any appropriate
claims under the maintenance, performance, or payment bonds; or lines of credit
required by subsection A 1 of &#xA7; 56-575.9.

E. In the event the responsible public entity elects to take over a qualifying
project pursuant to subsection A, the responsible public entity may develop or
operate the qualifying project, impose user fees, impose and collect lease
payments for the use thereof and comply with any service contracts as if it were
the private entity. Any revenues that are subject to a lien shall be collected
for the benefit of and paid to secured parties, as their interests may appear,
to the extent necessary to satisfy the private entity&#8217;s obligations to
secured parties, including the maintenance of reserves. Such liens shall be
correspondingly reduced and, when paid off, released. Before any payments to, or
for the benefit of, secured parties, the responsible public entity may use
revenues to pay current operation and maintenance costs of the qualifying
project, including compensation to the responsible public entity for its
services in operating and maintaining the qualifying project. The right to
receive such payment, if any, shall be considered just compensation for the
qualifying project. The full faith and credit of the responsible public entity
shall not be pledged to secure any financing of the private entity by the
election to take over the qualifying project. Assumption of operation of the
qualifying project shall not obligate the responsible public entity to pay any
obligation of the private entity from sources other than revenues.

HISTORY: 2002, c. 571; 2003, c. 1034; 2005, c. 865.