Guam § 66113 - Covenants and Agreements That May be Contained in

§ 66113. Covenants and Agreements That May be Contained in

Indenture.

An indenture may include any and all such covenants and agree-

ments on the part of Authority as are authorized by this Chapter or 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) That payments of principal and interest of bonds shall be

secured by all or by part of revenue;

(b) Creating one or more funds or accounts into which all or

any part of the revenue shall be deposited (i) for payment of the

principal of and interest on bonds at or prior to maturity, or (ii) for

reserve or sinking funds for the further security of bonds. All

moneys in any such fund or account shall be paid out by the trustee

to pay the principal of and interest and premiums on the bonds when

due or when redeemed or purchased prior to maturity, as provided

in any indenture.

(c) Requiring the Authority to cause to be paid punctually the

principal of an interest and premiums on the bonds on their due

dates from funds in the account or accounts provided therefore.

(d) 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.

(e) Requiring the Board and the trustee 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 and premiums thereon, and

any fund or account created therefor, and to apply and cause to be

applied such revenues or any part of revenues only as provided in

the indenture.

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(f) 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.

(g) Against entering into any agreement which would impair

the security of the bonds, the revenues or the mortgages or other

contract obligations acquired by it and from which the revenues are

derived.

(h) Against mortgaging or otherwise encumbering, selling,

leasing, pledging, placing a charge upon or disposing of any of the

revenues, mortgages or contract obligations from which the

revenues are derived, detrimental to the security of the bonds.

(i) Specifying the events of default and the terms and

conditions upon which any or all of the bonds may be declared due

and payable prior to maturity, and the terms and conditions upon

which such declaration and its consequences may be waived.

(j) For the rights, liabilities, powers and duties arising upon the

Agency’s breach of any covenants, conditions or obligations.

(k) For vesting in the trustee the right to or duty to enforce

covenants to secure payment of or in relation to the bonds and the

trustees powers, duties and limitations of its liabilities, and for the

conditions upon and manner in which a substitute trustee may be

appointed.

(l) For the terms upon which the bondholders or a percentage

of them may enforce covenants and duties prescribed in the

indenture and this Chapter.

(m) The procedure by which the terms and conditions of the

indenture or the bonds may be subsequently amended or modified

with the consent of the Board, subject to the approval of the

Governor, and the vote or written consent 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.

(n) The effect of any modification or amendment upon the

rights of the holders of all or a specified portion of any outstanding

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bonds and interest coupons pertaining thereto, whether attached

thereto or detached therefrom.

(o) With respect to a modification or amendment of an

indenture that bonds held by the Authority, the Territory, the United

States or any instrumentality of either thereof (including every

public corporation, political subdivision, city, county, district,

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.

(p) For the purchase out of any available funds of any

outstanding bonds or other obligations, and the price at and manner

in which the purchase may be made.

(q) That the Governor and the Director of Revenue and

Taxation 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 indenture, and (ii) perform all such cove-

nants and agreements which, under the Organic Act or any

provision of this Division or any other statute of the Territory, can

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

Governor and the Director of Revenue and Taxation or such other

officer or agency.

(r) Capitalizing any working capital fund or interest or account

or contingency fund or account.

(s) Provision for the refunding of all or any bonds authorized

by such indenture, subject to the provisions and limitations as herein

described.

(t) Such other acts and matters as may be necessary or

convenient or desirable in order to better secure the bonds or to

make the bonds more marketable.