An indenture pursuant to which bonds are issued and which is approved by legislation may include any and all such covenants and agreements on the part of the Authority, the Board, Guam, the Governor, the Director of Administration, the Treasurer, the General Manager or any other officer or agency of Guam, the Authority or the Board as are authorized by this Article 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:

(a) A provision that payments of principal and interest of bonds shall be secured by all or by part of revenues and provisions creating one or more funds or accounts to be held by the Director of Administration into which all or any part of revenues shall be deposited:

(1) for payment of the principal of and interest on bonds at or prior to maturity; or

(2) 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 Director of Administration or his agent to pay the principal of and interest on the bonds when due or when redeemed or purchased prior to maturity, as provided in any indenture.

(b) A provision requiring the Director of Administration or his agent, as trustee as hereinafter provided, 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 system continuously, to the extent practicable under conditions as they may from time to time exist, in any efficient and economical manner.

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(d) A provision requiring the Board to maintain the system and to make all necessary repairs, renewals and replacements to the system and to keep the system at all times in good 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 discharged all lawful claims for labor, materials and supplies or other charges which, if unpaid, might become a lien or charge upon revenues or any part thereof, or which might impair the security of the bonds.

(g) A provision which limits, restricts or prohibits any right, power or privilege of the Board to mortgage or otherwise encumber, sell, lease or dispose of the system or any part thereof, or to enter into any lease or agreement which impairs or impedes the operation of the system or any part thereof necessary to secure adequate revenues or which otherwise impairs or impedes the right of the holders of bonds with respect to such revenues.

(h) A provision requiring the Board to fix, prescribe and collect annually rates or other charges in connection with the electric service furnished from the system which, together with other available revenues, will be:

(1) 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 bond reserve fund or account or other fund or account created by the indenture for the security of such bonds;

(2) sufficient to pay the annual system operation and maintenance costs; and

(3) in such additional amount as shall be provided in the indenture for the further security or protection of such bonds.

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(i) A provision that no electric service 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 Treasurer 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 fund or account created by any indenture relating to such bonds for the further security or 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 Treasurer in applying the proceeds of the sale of any issue of bonds for the acquiring, constructing or completing of the system or any part thereof.

(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 the system 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 (or any reserve fund or funds in lieu of insurance) to be maintained by the Board on the system or any part thereof and the use and disposition of the proceeds of any such insurance thereafter collected or of the moneys in any such reserve fund.

(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.

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(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 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 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 Authority, Guam, 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 of 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.

(q) A provision for the refunding of all or any bonds authorized by such indenture, subject to the provisions and limitations of Sections 8228 and 8229.

(r) A provision permitting the Authority, the Board or the Director of Administration to purchase outstanding bonds of the Authority from any moneys or funds or accounts referred to in the indenture or otherwise legally available for such purpose.

(s) A provision that the Governor, the Treasurer and the Director of Administration and all other officers and agencies of Guam shall:

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(1) be bound by all of the covenants and agreements on the part of the Board set forth in such indenture; and

(2) perform all such covenants and agreements which, under the Organic Act or any provision of this Code or any other statute of Guam, can be taken for, or on behalf of, or in lieu of the Board only by the Governor, the Treasurer and the Director of Administration or such other officer or agency.

(t) A provision for any working capital fund or account or contingency fund or account relating to the system.

(u) A provision for the replacement of lost, destroyed or mutilated bonds or coupons.

(v) 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.

(w) As to existing bond issues and indentures and covenants thereto, no changes as indicated above nor any changes relating to repayment schedules or sinking fund requirements may be approved or agreed to except upon action of the Board of Directors of the Guam Power Authority after approval by legislation. Neither the Guam Power Authority nor the Governor shall have the authority to amend any Guam Power Authority bond covenants, indentures or agreements as to bond issues if such bond issues can be paid from, obligate, or are secured by Section
30 money, money or revenues owed to the Government of
Guam, or money or other funds belonging to or payable to the Government of Guam. Any offer to make any such changes or amendments as indicated above shall be deemed withdrawn upon the effective date of this Act, and shall thereafter be subject to approval by legislation as herein indicated.

SOURCE: GC § 21559, as repealed and reenacted by P.L. 17-029.

2023 NOTE: References to “”Territory”” replaced with “”Guam”” pursuant to 1 Guam Code Ann. § 420.

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2012 NOTE: Pursuant to the authority granted by 1 Guam Code Ann. § 1606, numbers and/or letters in subsection (a), (h), and (s) were altered to adhere to the Compiler’s alpha-numeric scheme.