                                 CODE OF VIRGINIA

SECURITY FOR PAYMENT AND BONDS; PROVISIONS OF TRUST INDENTURE OR RESOLUTION OF
BOARD (§ 22.1-168)

In the discretion of the Board of Commissioners any bonds issued under the
provisions of this chapter may be secured 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 without the Commonwealth. Such
trust indenture or the resolution providing for the issuance of such bonds may
pledge or assign all or any part of the funds of the Authority available for
such purpose including, but without limitation, all or any combination of the
following sources: (i) payments of principal of and interest on local school
bonds purchased by the Authority, (ii) the proceeds of the sale of any such
local school bonds, (iii) payments of principal of and interest on obligations
transferred to the Authority from the Literary Fund, (iv) the proceeds of the
sale of any such obligations, (v) any moneys transferred to the Authority from
the Literary Fund, (vi) payments of principal of and interest on loans made to
local school boards, and (vii) any funds authorized by the General Assembly for
such purpose from the Literary Fund or otherwise appropriated by the General
Assembly. Such trust indenture or resolution providing for the issuance of such
bonds may provide for the creation and maintenance of such reserves as the Board
of Commissioners shall determine to be proper and may include covenants setting
forth the duties of the Board of Commissioners in relation to the acquisition of
any local school bonds, the substitution of any local school bonds as security
for payment of the bonds of the Authority, the collection of payments of
principal and interest on (i) any local school bonds, (ii) on any obligations
transferred to the Authority from the Literary Fund, and (iii) on any loans made
to local school boards. Such trust indenture or resolution may include
provisions requiring the Authority or the trustee under such trust indenture or
any depository to file a petition with the Governor and to take any and all
other action required under § 15.2-2659 to secure payment of all sums necessary
to cover any default as to any bonds or the interest thereon held by the
Authority or by such trustee or depository to which § 15.2-2659 shall be
applicable. Such trust indenture or resolution may contain provisions respecting
the custody, safeguarding and application of all moneys and securities including
local school bonds purchased by the Authority and obligations transferred to the
Authority from the Literary Fund and may 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. It shall be lawful for any bank or trust
company incorporated under the laws of the Commonwealth which may act as
depository of the proceeds of bonds or of any other funds or obligations
received on behalf of the Authority to furnish such indemnifying bonds or to
pledge such securities as may be required by the Board of Commissioners. Any
such trust indenture or resolution may contain such other provisions as the
Board may deem reasonable and proper for the security of the bondholders. Any
reference in this chapter to a resolution of the Board of Commissioners shall
include any trust indenture authorized thereby.

HISTORY: Code 1950, § 22-29.8; 1962, c. 194; 1972, c. 745; 1980, c. 559; 1990,
c. 909.