Guam § 5 - Application of Bond Fund.

§ 5. Application of Bond Fund.

(A) Subject to subsection CD) of this Section, all amounts m

the Bond Fund shall be used and withdrawn by the Trustee solely

for the purpose of (1) paying interest on the Bonds as it shall

become due and payable (including accrued interest on any Bonds

purchased or redeemed prior to maturity pursuant to this

Indenture), (2) paying the principal of the Serial Bonds when due

and payable, and (3) purchasing or redeeming or paying at

maturity the Term Bonds as provided in this Section.

(B) Subject to subsection (D) of this Section, on each

Mandatory Sinking Account Payment date, the Trustee shall apply

the Mandatory Sinking Account Payment or Payments required

on that date to the redemption (or payment at maturity, as the ease

may be) of the applicable Term Bonds upon the notice and in the

manner provided in Article IV. At any time prior to giving such

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notice of such redemption, the Trustee, upon the Request of the

Government, shall apply moneys in the Bond Fund, in an amount

not in excess of such Mandatory Sinking Account Payment, to the

purchase of the applicable Term Bonds at public or private sale,

as and when and at such prices (including brokerage and other

charges) as are specified in such Request, except that the purchase

price (excluding accrued interest) shall not exceed the price that

would be payable for such Bonds upon redemption by application

of such Mandatory Sinking Account Payment.

(C) Subject to the terms and conditions set forth in

subsections (B) and CD) of this Section and in § 4.01(B), Term

1997 Series A Bonds shall be redeemed (or paid at maturity, as

the case may be) by application of Mandatory Sinking Account

Payments for such Bonds, in the amounts (after giving effect to

the credits provided for in this Section) and upon the Principal

Payment Dates in the years hereinafter set forth:

Mandatory Sinking Account

Payments for Bonds Due

____________, 200__

Year Amount Year Amount

Mandatory Sinking Account

Payments for Bonds Due

____________, 200__

Year Amount Year Amount

Upon the redemption of Term 1997 Series A Bonds pursuant

to § 4.01(A), the principal amount of such Bonds shall be credited

against remaining Mandatory Sinking Account Payments in such

manner as may be designated by Request of the Government,

provided that Mandatory Sinking Account Payments shall remain

as integral multiples of $5,000. If, (1) during the twelve-month

period immediately preceding a Mandatory Sinking Account

Payment date the Trustee purchases the applicable Term Bonds

with moneys in the Bond Fund, or (2) during said period and prior

to giving said notice of redemption the Government otherwise

deposits the applicable Term Bonds with the Trustee (together

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with a Request of the Government to apply such Bonds so

deposited to the Mandatory Sinking Account Payment due on said

date), the amount of Bonds so purchased or deposited shall be

credited the time of such purchase or deposit, to the extent of the

full principal amount thereof, to reduce such Mandatory Sinking

Account Payment. All Bonds purchased or deposited pursuant to

this subsection shall be canceled and delivered by the Trustee to

or upon the Order of the Government.