2.4.5.1 Debt Covenants

Debt covenants are included to some degree in all bond documents. These may include covenants to do the following:

Pay all debt service punctually and not extend the time for payment.
Budget and appropriate funds for the payment of debt service.
Levy and collect the taxes, fees, or assessments from which debt service is to be paid.
Comply with the terms of all of the bond documents, including any continuing disclosure undertaking.
Take actions necessary to preserve, and not take actions that will adversely affect, the tax exemption of interest on the debt.

Bond documents also generally include a covenant of “further assurances,” an agreement to adopt, deliver, execute, and make any and all further assurances, instruments, and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the issuer of its obligations under the bond documents and assuring and confirming to the bondholders the rights and benefits provided to them in the bond documents. There is also the implied covenant of good faith and fair dealing in every California contract.69