Covenants and Agreements That May be Contained in Indenture

An indenture pursuant to which bonds are issued may include any and all covenants and agreements on the part of the government as I Maga’hågan/Maga’låhen Guåhan deems necessary or advisable, including, without limiting the generality of the foregoing, any one

(1)or more of the following:

(a)A provision that payments of principal and interest of bonds shall be secured by a pledge of all or by part of the revenue of the system or the Section 30 revenue or both.

(b)Provisions creating one

(1)or more funds or accounts into which all or any part of pledged revenue 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.

(c)A provision requiring the government to operate the system continuously, to the extent reasonably practicable under conditions as they may from time to time exist, in an efficient and economical manner.

(d)A provision requiring the government 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 government 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 government 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 pledged revenue 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 government to mortgage or otherwise encumber, sell, lease or dispose of the system or any part thereof, in any manner that impairs or impedes the operation of the system or any part thereof necessary to secure adequate pledged revenue or that otherwise impairs or impedes the right of the holders of bonds or other obligations with respect to such pledged revenue.

(h)A provision requiring the government, with the prior approval of the Guam Public Utilities Commission, to fix, prescribe and collect annually rates or other charges in connection with the solid waste management services furnished from the system which, together with other available revenues, including, to the extent provided by an indenture, Section 30 revenue, 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 any payments due under any lease or lease-back entered into pursuant to Article 9 of this Chapter;

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

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

(i)A provision that no solid waste management service shall be furnished free of charge to any person, except to the extent permitted by the indenture. CH. 51A GUAM SOLID WASTE AUTHORITY

(j)A provision requiring the government to hold or cause to be held in trust the pledged revenue or any part thereof, or to any fund or account created by any indenture for the further security or protection of such bonds and to apply such pledged revenue or cause it to be applied only as provided in the indenture and to invest all or any part of such pledged revenue 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 government 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 government to issue additional bonds or to enter into one

(1)or more lease-back obligations pursuant to Article 9 of this Chapter, in each case equally secured with bonds theretofor issued under the indenture and lease-back obligations previously entered into, for the purpose of acquiring, constructing or completing, improving or extending the system or any part thereof, or for the purpose of refunding any prior bonds or any other prior obligations of the government relating to the system; and a provision limiting the power of the government 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 government 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 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 government 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 government 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.

(q)With respect to any provision relating to the modification or amendment of an indenture, the government may agree that bonds held by the government, the United States or any instrumentality of either thereof (including every public corporation, political subdivision, 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.

(r)A provision limiting the right of action by individual bondholders in the event of a default by the government or proscribing the procedure for the conduct of any such action by an individual bondholder.

(s)A provision permitting the government to purchase outstanding bonds from any moneys or funds or accounts referred to in the indenture or otherwise legally available for such purpose.

(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. CH. 51A GUAM SOLID WASTE AUTHORITY

(v)A provision or provisions relating to 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.