Use of Tax-Exempt Bonds for Financing

(a)To minimize the financing cost to the Education Agency, all financing utilized by the Contractor to fund the design, construction and maintenance of an Education Facility shall be through tax-exempt bonds or other financial instruments, if a mechanism to do so is available. The purpose for this requirement is to assure the Education Agency pays the lowest possible interest rate so that the cost of financing the design, construction and maintenance of an Education Facility to the Education Agency, amortized through the Lease-Back payments from the Education Agency to the Contractor, will be lower than regular commercial rates.

(b)The Lease and the Lease-Back may include a pledge of compact impact funds or other federal grant revenues that are legally available for such purpose. Any such pledge made hereunder shall be valid and binding from the time the pledge is made.

(c)The revenues pledged and thereafter received by the government of Guam or by any trustee, depository or custodian shall be deposited in a separate account and shall be immediately subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the government of Guam or such trustee, depository or custodian, irrespective of whether the parties have notice thereof. COL292017 CH. 58 THE EDUCATION FACILITIES CONSTRUCTION INITIATIVE ACT OF 2001

(d)The instrument by which such pledge is created need not be recorded.