CODE OF VIRGINIA

(EFFECTIVE OCTOBER 1, 2016) SECURITY FOR BONDS (§ 23.1-1208)

A. The Authority may secure any bonds issued under the provisions of this
article by a trust indenture by and between the Authority and a corporate
trustee, which may be any trust company or bank having the powers of a trust
company within or outside the Commonwealth. Such trust indenture or the
resolution providing for the issuance of such bonds may:

   1.  Pledge or assign all or part of the funds of the Authority available for
   such purpose, including (i) payments of principal of and interest on bonds of
   eligible institutions purchased by the Authority; (ii) proceeds of the sale of
   any such bonds; (iii) payments of principal of and interest on obligations
   transferred to the Authority by the General Assembly or from other assets or
   moneys transferred to the Authority by the General Assembly or eligible
   institutions, including lease payments and other sources of revenue; (iv)
   proceeds of the sale of any such obligations or assets; (v) proceeds from the
   sale of bonds of the Authority; (vi) security interests granted by the
   Authority or any eligible institution in, or other liens on, equipment,
   whether such equipment has been leased or sold to an eligible institution;
   (vii) all or part of the payments due the Authority from eligible institutions
   under any lease, sale agreement, loan, or other agreement between the
   Authority and eligible institutions pursuant to § 23.1-1206, and any funds
   realized from enforcing security for such payments; (viii) payments due under
   policies of bond insurance, letters of credit, or other credit enhancement
   securing payment of principal of and interest on bonds of the Authority; (ix)
   any moneys in any fund established pursuant to § 23.1-1206; (x) any reserve
   or sinking fund created by the Authority to secure such bonds; and (xi) other
   available funds of the Authority;

   2.  Pledge or assign any other rights of the Authority in equipment owned by,
   or leases or sales of equipment made by, the Authority;

   3.  Contain such provisions for protecting and enforcing the rights and
   remedies of the bondholders as may be reasonable and proper and not in
   violation of law;

   4.  Provide for the creation and maintenance of such reserves as the Authority
   determines to be proper;

   5.  Include covenants setting forth the duties of the Authority in relation to
   the acquisition of any equipment or bonds of eligible institutions; the care,
   leasing, or sale of equipment to eligible institutions; the substitution of
   any bonds of eligible institutions, equipment, lease, security interest, or
   other security as security for the payment of the bonds of the Authority; the
   care, use, and insurance of equipment; the repossession and sale of leased or
   sold equipment by the Authority or the trustee under any trust indenture upon
   any default under the lease or sale of such equipment; and the collection of
   (i) payments due the Authority under leases or agreements of sale of equipment
   and (ii) payments of principal of and interest on any bonds of eligible
   institutions or obligations or other assets held by the Authority. Any bank or
   trust company incorporated under the laws of the Commonwealth that acts as
   depository of the proceeds of bonds or revenues may furnish such indemnifying
   bonds or pledge such securities as may be required by the Authority;

   6.  Set forth the rights and remedies of the bondholders and the trustee;

   7.  Restrict the individual right of action by bondholders; and

   8.  Contain such other provisions as the Authority deems reasonable and proper
   for the security of the bondholders.

B. All expenses incurred in carrying out the provisions of any such trust
indenture or resolution may be treated as a part of the administration costs of
the Authority.

C. Neither the resolution nor any trust indenture by which a pledge is created
need be filed or recorded except in the records of the Authority.

HISTORY: 1964, c. 607, § 23-30.29; 1966, c. 685; 1986, c. 597; 1996, cc. 672,
689; 2016, c. 588.