Guam § 17108 - Covenants and Agreements That May Be Contained in

§ 17108. Covenants and Agreements That May Be Contained in

Indenture.

An indenture pursuant to which bonds are issued may, with the

approval of the Governor, include any and all such covenants and

agreements on the part of the Board, the Territory, the Governor, the

Director of Administration or any other officer or agency of the Territory as

the Board deems necessary or advisable for the better security of the bonds

issued thereunder, including, without limiting the generality of the

foregoing, any one or more of the following provisions:

(a) A provision that payments of principal and interest of bonds shall

be secured by all or by part of revenues.

(b) A provision requiring the Director of Administration to pay or

cause to be paid, punctually, the principal of all such bonds and the interest

thereon on the date or dates, or at the place or places, and in the manner

mentioned in such bonds and in the coupons appertaining thereto in

accordance with such indenture.

(c) A provision requiring the Board to operate the project continuously,

to the extent practicable under conditions as they may, from time to time,

exist, in an efficient and economical manner.

(d) A provision requiring the Board to make all necessary repairs,

renewals and replacements to any project, and to keep the project, at all

times, in good repair, working order and condition.

(e) A provision requiring the Board to preserve and protect the security

of the bonds and the rights of the holders thereof and to warrant and defend

such rights.

(f) A provision requiring the Board to pay and discharge or cause to be

paid and discharge all lawful claims for labor, materials and supplies or

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other charges which if unpaid, might become a lien or charge upon the

revenues or any part thereof, of any project acquired, constructed or

completed from the proceeds of sale of bonds, or upon any physical

properties, or which might impair the security of the bonds.

(g) A provision which limits, restricts or prohibits any right, power or

privileges of the Board to mortgage or otherwise encumber, sell, lease or

dispose of any improvements constructed from the proceeds of sale of

bonds or to enter into any lease or agreement which impairs or impedes the

operation of a project, or any part thereof, necessary to secure adequate

revenues or which otherwise impairs or impedes the rights of the holders of

bonds with respect to such revenues.

(h) A provision requiring the Board to fix, prescribe and collect rates,

rentals or other charges in connection with the services and facilities

furnished from the project acquired, constructed or purchased from part or

all of the proceeds of the bonds, sufficient to pay the principal of and

interest on the bonds as they become due and payable, together with such

additional sums as may be required for any fund created by this Chapter, for

the further security of such bonds or as a depreciation charge or other

charges in connection with such projects.

(i) A provision that no project acquired, constructed or completed from

the proceeds of sale of bonds issued under the provisions of this Chapter

shall be used without charge therefor and that no facilities of any such

project shall be furnished free of charge to any person, except to the extent

permitted by the indenture.

(j) A provision requiring the Board and the Director of Administration

to hold or cause to be held in trust the revenues or any part of revenues

pledged to the payment of such bonds and the interest thereon, or to any

reserve or other fund created by this Chapter or by the indenture relating to

such bonds for the further protection of such bonds, and to apply such

revenues or any part of revenues or cause them to be applied only as

provided in the indenture and to invest all or any part of such revenues

pending such application in such securities and subject to such limitations

as are specified in the indenture.

(k) A provision defining the power of the Board and the Director of

Administration in applying the proceeds of the sale of any issue of bonds

for the acquiring, constructing or completing of any project or any part

thereof.

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(l) A provision permitting the Board to issue additional bonds or one or

more additional series of bonds, equally secured with bonds theretofore

issued under the indenture, for the purpose of acquiring, constructing or

completing, improving or extending any project or any part thereof; and a

provision limiting the power of the Board to issue any additional bonds so

secured or any other additional bonds for such purpose.

(m) A provision requiring, specifying or limiting the kind, amount and

character of insurance to be maintained by the Board on any project, or any

part thereof, and the use and disposition of the proceeds of any such

insurance thereafter collected.

(n) A provision specifying the events of default and the terms and

conditions upon which any or all of the bonds of the Board then or

thereafter issued may become or be declared due and payable prior to

maturity, and the terms and conditions upon which such declaration and its

consequences may be waived.

(o) A provision designating the rights, limitations, powers and duties

arising upon breach by the Board of any of the covenants, conditions or

obligations contained in the indenture.

(p) A provision prescribing a procedure by which the terms and

conditions of the indenture may be subsequently amended or modified with

the consent of the Board, subject to the approval of the Governor, and the

vote or written assent of the holders of a specified principal amount or

specified proportion of the bonds issued and outstanding, including

provisions for meetings of bondholders and for the manner in which the

consent of the bondholders may be given, and specifically stating the effect

of such amendment or modification upon the rights of the holders of all of

the bonds and interest coupons appertaining thereto, whether attached

thereto or detached therefrom.

With respect to any provision relating to the modification or

amendment of an indenture, the Board, with the approval of the Governor,

may agree that bonds held by the Territory, the United States or any

instrumentality of either thereof (including every municipal corporation,

district, public corporation, board, agency or instrumentality of any kind or

class) shall not be counted as outstanding bonds, or be entitled to vote or

assent, but shall, nevertheless, be subject to any such modification or

amendment.

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(q) A provision that the Governor, the Director of Administration and

all other officers and agencies of the Territory shall (i) be bound by all of

the covenants and agreements on the part of the Board set forth in such

indentures, and (ii) perform all such covenants and agreements which, under

the Organic Act or any provision of this Code or any other statute of the

Territory, can be taken for or on behalf or in lieu of the Board only by the

Governor, the Director of Administration or such other officer or agency.

(r) A provision or provisions relating to such other acts and matters as

may be necessary or convenient or desirable in order better to secure the

bonds or to make the bonds more marketable.