The URL can be used to link to this page

Ordinance No. 235 - RetiredINDEX TO ORDINANCE NO. 235 AN ORDINANCE PROVIDING FOR THE ISSUANCE OF SEWER REVENUE BONDS, FIXING THE FORM OF BONDS AND PROVIDING COVENANTS FOR THEIR PROTECTION SOUTH TAHOE PUBLIC UTILITY DISTRICT $450,000 SEWER REVENUE BONDS OF 1973 Page 1 A. GENERAL PROVISIONS .................. 1 1. Bond Law ................... 2 2. Definitions .................. Public Interest ............... 3. Precedent 4. Conditions ............. 5. Purpose of Bonds ............... 6 Project Cost ................. 3 7. Complete Project ............... 3 at Adequate Funds ............. b Adequate Rates ............. c Bond Payment .............. 4 8. Single Transaction .............. 4 9. Separate Fund ................. l0. Legality ................... B. ISSUE, DENOMINATIONS AND INTEREST OF BONDS ...... Issue .................. 5 ll. Denomi~a[igns 1~o o o Interest ' M~t~rit~ .......... 13. A~t~r 14 Interest ............ C. FORM, TERMS, NATURE, EXECUTION, DELIVERY AND REGISTRATION OF BONDS ................ of Bonds and Coupons ........... 15. Form -. ....... 16 Where Payable ........ · Payment 17. Source of ............... 18. Bonds Not a Debt ~ ~ ~ ; ~ .......... 19. Entity Credit Not n u b r d ......... 20 Bonds a Special Obligation .......... 21. Negotiable Instruments ............ 22. Execution of Bonds gf'Sig ....... 23. Continuing Validity a u e ....... 24 Delivery of Bonds ............... 25. Transcript .................. 26 Record of Bonds .............. · Registration of ~o~ds ............. 27. a) Principal and Interest ......... b) Principal Only ............. c) Deregistration ............. d) Reregistration ............. 5 5 5 5 5 5 6 6 6 6 6 6 6 6 6 7 7 7 7 D. CALLABLE BONDS AND PROCEDURE ............. 7 28. Callable Bonds ................ 7 29. Notice of Redemption ............. 8 30. Form of Notice ................ 8 e 31. Receipt of Notice Unnecessary ........ 8 32. Certificate of Notice Conclusive ....... i 34. 35. Redemption Fund ................ i1 Use of Funds .............. Coupons Due ............... Coupons Not Due ............. Retransfers ........... - - --- Effect of Notice of Redemption ........ Interest Terminates a/ Matured Coupons Paya~l~ ......... Purchase of Bonds ............... E. PLEDGE OF REVENUES AND FUNDS ............. 37. Pledge of Revenues .............. 38. First Lien on Revenues ............ 39. Revenues a Trust Fund ............. 40. Equal Parity ................. 41. Ratio of Net Revenue Coverage ......... 42. Proceeds of Bonds ............... Reserve Fund i1 Acquisition Co~t~ ............ Construction Costs ........... Incidental Expenses ........... Bond Fund ................ 43. Revenue Fund ................. 44. Bond Fund ................... 45. Reserve Fund . ~t~ ' ~u .......... ~6. Maintenance and ~p~r on nde ........ 47. Surplus Fund 'P'i-r't-r o i y ............ 48. Feeding Higher ............. 49 Investment of Surplus Funds 50. Inactive Deposits ............... 50-A. Sufficiency of Revenues ~ ~ ~ ......... 50-B. No Restriction on Other o e s ........ 50-Co Collection of Revenues ............ F. COVENANTS BY THE ENTITY ............... 51. 52. 55. 56. 57. 59. 60. 6:1.. 62. 63. 64. 65. 66. Covenants ................... Acquire Project ................ Operate Enterprise .............. Good Repair .................. Preserve Security ............... Collect Revenues ............... Service Bonds ................. Pay Claims .................. Encumbrances ................. No Free Service ................ No Competition ................ Insurance ............ · ...... Fidelity Bonds ................ Engineers ................... Audit and Report ............... a Balance Sheet .............. b Revenue and Payments .......... c Insurance ................ d Customers ................ e Billing ................ ' Schedule f Rate .............. g Recapitulation ............. h Comments. ............... Unconditional Obligation ......... , · . Pa,ge, 8 8 8 8 9 9 10 10 10 10 10 11 11 11 11 11 11 11 12 ~3 ~3 14 14 ]5 15 15 15 15 15 15 15 15 15 15 16 16 16 16 16 16 16 16 16 16 17 17 17 -- ii 67. Performance of Essence .............. 68. Recourse to Bond Law ............... 69. Indenture is Covenant .............. 70. Continuing Agreement ............... 71. Period of Agreement ............... 71-A. Arbitrage .................... G. ADDITIONAL AND REFUNDING BONDS ............. 72. Additional Bonds ................. 73. Default ..................... 74. Terms ...................... 75. Net Revenues . · · ~ ~ ~ ; · · ;igr ........ a/ During Term o o d of P Lien ..... b After Term of Bonds of Prior Lien ..... 76. Estimated Additional Net Income ......... l Additional Connections ........... Acquisitions ................ Construction ................ Rate Increase ............... 77 Refunding Bonds ................. 78 Subordinate Lien Bonds .............. ' Issuance of Refunding Bonds ........... 79. 80. Amount of Refunding Bonds ............ 81. Refunding Bonds of Prior Lien .......... 82 Deficiency Bonds ...p~ ~ ~ ~ ~ ~ ~ ~ ...... Independent Certified b i c o n a t ..... 84. Independent Engineer ............... H. MODIFICATIONS AND AMENDMENTS .............. 85 Modifications o . · · ......... 86. 87° 88, 89. 90° 91. 92° 93. Calling Bondholders' ~e~t~n~ ........... Notice of Meeting ................ Notice Conclusive ............... Voting Qualifications · ~ ~ ~ .......... Attendance and Voting By r x .......... Quorum and Procedure ............... Vote Required .................. Filing Certificate ................ I o EVENTS OF DEFAULT AND REMEDIES ............. 94 Event of Default ................. / Principal ................. Interest ................ Covenants ................. Bankruptcy ................. 95. Accelerati°n ° ~ ~ ~'' : i'i i ~g: ...... 96. Application of u d ~ ~ ~ ...... a) Bonds of Prior i n 0 t t n i and Not in Default ..... b) Bonds of Prior Li~n'0~t~t~n~i~g'a~d in Default .... ~ ~ ~ ~ ~ ...... c) After Term of Bonds o r o n ..... i o Costs and Expenses .......... ii. Interest on Undue Bonds ....... iii. Principal and Interest on Due Bonds . d) Procedure for Application t o d ..... 97. Bondholder Remedies ............... a/ Accounting ................. b Injunction ................. c Mandamus .................. Page 17 17 17 17 17 18 18 18 18 18 18 18 19 19 19 19 19 19 2O 20 2O 20 21 21 21 22 22 22 22 22 23 23 23 23 23 2a 24 24 24 25 25 ~5 25 25 25 25 25 26 iii 99. Nature of Remedies ............... Cumulative Delays .................. Enforcement ............... Status Quo ................ J. FISCAL AGENTA e t-g'n' .................. 100. Fiscal .................. 101. 102. 103. lO4. lO5. 106. 107. lO8o 109. Acceptance ................... Resignation .................. Removal .................. Continued Ser~i~e ............... Funds ................. Bond Re~e~p%i;n ................ Records .................... Compensation .................. Responsibilities ................ Page, 26 26; 26 26; '26 26 26 26 26 26 27 27 27 27 27 EXHIBIT "A" BOND FORM, COUPON FORM, REGISTRATION FORM i-iv - iv WJML: KJmh 6-1-73-55 ORDINANCE NO. 235 _ AN ORDINANCE PROVIDING FOR THE ISSUANCE OF SEWER REVENUE BONDS, FIXING THE FORM OF BONDS AND PROVIDING COVENANTS FOR THEIR PROTECTION SOUTH TAHOE PUBLIC UTILITY DISTRICT $450,000 SEWER REVENUE BONDS OF 1973 BE IT ENACTED by the Board of Directors of the South Tahoe Public Utility District: WHEREAS, the South Tahoe Public Utility District, herein called "Entity", is a public utility district duly organized and now existing under and pursuant to the provisions of the Public Utilities Code of the State of California; WHEREAS, this Board has heretofore issued and sold duly authorized sewer revenue bonds in the original principal amounts, respectively, of $1,400,000 Sewer Revenue Bonds of 1966, and $500,000 Sewer Revenue Bonds of 1967, and a portion of each of said issues are now outstand- ing and unpaid; WHEREAS, this Board adopted on May 17, 1973, Resolution No. 180~, entitled "A Resolution of Intention to Acquire and Construct Sewer Pumping Station and Interceptor Sewer and to Issue Sewer Revenue'Bonds to Cover the Cost Thereof" providing for the acquisition, construction, improving and financing of sanitary sewer facilities therein described and sometimes therein called "Works" herein referred to as "Project", said Project to serve an area within Entity therein described and here- in called "Area"; WHEREAS, in accordance with law, a public hearing was duly held thereon, after due notice thereof, and no petition of owners was filed requesting that the Board call and hold a special election of the property owners in the Area on the proposition of issuing said bonds, and written protests or objections by more than one-half of the owners of improved real property ~n the Area were not filed; and WHEREAS, Entity proposes herein to issue revenue Bonds to finance the cost of the acquisition, construction, improving and financing of the Project, and to provide that the principal of and interest on the Bonds shall be paid from a Bond Fund and that their payment be further secured bY a Reserve Fund herein created, both of which funds will be maintained from the Gross Revenues of the Enterprise, and said Revenues will be such that the Entity can and does herein determine that the principal of and interest on the Sewer Revenue Bonds of 1966, the Sewer Revenue Bonds of 1967, and the Bonds of this Issue, together with the payment of all other obligations which are or may be a charge against ~_ said Revenues, can be financed solely from said Revenues and to which its tax fund need not make any contribution at all; NOW, THEREFORE, IT IS DETERMINED and ORDERED, as follows: Ao GENERAL PROVISIONS 1. Bond Law. The proceedings have been conducted and the Bonds are being issued pursuant to Chapter 5, Part 3, Division 5 of the Health and Safety Code of the State of California, commonly referred to as the Sewer Revenue Bond Act of 1933. 2. Definitions. lowing meanings: As used herein the terms herein have the fol- a) Annual means the fiscal year of the Entity, which is from July ~ to June 30, both inclusive° b) Area means the area to be served by the Project, as described 1-~esolution No. 1802, including areas served by additions, extensions, improvements and betterments thereto. c) Bondholder or Holder of Bonds mean the holder of a bearer bon~ or the regis"tered owner of a registered bond. d) Bond Law means the Sewer Revenue Bond Act of 1933, as amended, c---~in Section i above. e) Bonds of Prior Lien means the outstanding and unpaid portion of-~he $1,~00,000 isSue of Sewer Revenue Bonds of 1966 authorized to be issued by Resolution No. 641, adopted by the Legislative Body on December l?, 1965, as amended, and the outstanding and unpaid portion of the $500,000 issue of Sewer Revenue Bonds of 1967 authorized to be issued by Ordinance No. 135 adopted by the Legislative Body on February 23, 1967. f) Bonds or Revenue Bonds or Bonds of This Issue mean the issue o--~nds in the tOtal principal amount oT' $450,000 herein authorized to be issued by the Entity. g) Bond Year means the.period between the dates of maturity of the annual series of Bonds. h) Charges mean fees, tolls, rates and rentals prescribed by the LegislatiVe Body for 'the services or facilities of the Enterprise. i) Clerk or Secretary mean the person elected or appointed a--~e Clerk or Secretary of the Entity and its Legislative Body° j) Enterprise means the sewage treatment plant and facilities] trUnk sewers, pumping station and disposal facili- ties of the entire district, together with all additions and improvements to said system hereafter made, including the Project. k) Entit_j_ means the South Tahoe Public Utility District. l) Fin__~ance Officer or Treasurer mean the officer desig- nated by law to handle~the fuh'ds of the Entity. m) F_iscal Agent means the Bank of America N.T. & SoA., principal office,"'San Francisco, California, unless otherwise provided. n) Fiscal Year means the fiscal year of the Entity which is from JulY i to JUne 30, both inclusive. o) Gross Revenues mean annual revenues of the Enterprise. p) Improve means to reconstruct, replace, extend, repair, better, equip, embellish or otherwise improve. q) Indenture means this Ordinance° r) LegislatiVe Body means the Board of Directors, which is the gov'e'rning body of the Entity. s) Net Revenues or Net Revenues of the Enterprise mean annual gross revenues of t~'e Enterprise after deducting all sums expended therefrom for the annual management, operation, maintenance and repair thereof, including all incidental costs, fees and expenses properly chargeable thereto. t) Presiding Officer means the President of the Legis- lative Body. u) Project means the additions and improvements to the Enterprise, the cost of acquiring, constructing, improving and financing of which is to be paid from the proceeds of the Bonds of this Issue. v) Revenues mean all charges received for, and all other income and receipts derived from the Operation of the Enterprise or arising from the Enterprise, including revenues deposited in any funds to secure or to provide for the payment of the Sewer Revenue Bonds of 1966, the Sewer Revenue Bonds of 1967, and the Bonds of this Issue, and interest received on any invested moneys. 3. Public Interest. The public interest, 6conomy and general welfare wi~'~' Ye served by the acquisition, construction, improving and financing of the Project, including all expenses incidental there- to or connected therewith. 4o Conditions Precedent. All acts, conditions and things required by law to eXist, happen and be performed precedent to and in the issuance of the Bonds have existed, have happened and have been performed in due time, form and manner as required by law, and the Entity is now authorized, pursuant to each and every requirement of law, to issue Revenue Bonds in the manner and form as provided herein. 5o purpose of Bonds. Revenue Bonds of the Entity shall be issued to pay the cost of the acquisition, construction, improving and financing of the Project. 6. Project Cost. The total estimated cost of the Project, including 'c"onstruction of improvements, the engineering and other fees, and all other expenses incidental thereto including bond dis- count, if any, is the sum of $450,000, all of which will be paid from the proceeds of the Bonds of this Issue. 7o Complete Project. It is hereby found and determined that the Entity has made all necessary arrangements for the financing of the Project. Accordingly, it is hereby found and determined that: a) Adequate Funds. The Project can be accomplished as part of the Enterprise to constitute a complete system from the funds to be available from the proceeds of the sale of the Bonds. b) Adequate Rates. Charges have been and will be fixed, levi"e'd and collected for the services or facilities to be furnished by the Enterprise. c) Bond Payment. The charges and all other income and receipts included in the definition of "Revenues', shall con- stitute the Revenues of the Enterprise pledged to service the Bonds as provided herein° 8. Single Transaction. The Enterprise, including the Project, is one transaction, complete in and of itself, and the proceeds of the Bonds of this Issue will be applied to the cost thereof as here- in provided. 9. Separate Fund° The Entity, during the term of the Bonds, will operate the EnterPrise as a separate and distinct agency, and will create and maintain a separate and distinct special fund and account for the Enterprise into which all Revenues to be received are to be deposited, and from which all disbursements herein provided, relating to the Enterprise, are to be made during the term of the Bonds. 10. Legality° If any section, paragraph, subdivision, sentence, clause or phrase of this Indenture shall for any reason be adjudged by any court of competent jurisdiction to be unconstitutional, unenforce- able or invalid, such judgment shall not affect the validity of the remaining portion of this Indenture. The Legislative Body hereby declares it would have adopted this Indenture and each and every other section, paragraph, subdivision, sentence, clause or phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the facts that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases of this Indenture may be held to be unconstitutional, unenforceable or invalid. B: ISSUE~ DENOMINATIONS AND INTEREST OF BONDS 11. Issue. The Bonds shall be dated September 1, 1973, shall be in the ~ aggregate amount of $450,000, shall be numbered con- secutively, and shall mature on July i in each of the years and amounts, as follows: Bond Nos. (Both Inclusive) $1,000'"be- $5,000 De- nominations nominations 1 - 15 i - 3 16 - 30 4 - 6 31 - 45 7 - 9 46 - 60 10 - 12 61 - 75 13 - 15 76 - 95 16 - 19 96 - 115 20 - 23 116 - 135 24 - 27 136 - 155 28 - 31 156 - 18o 32 - 36 181 - 205 37 - 41 206 - 230 42 - 46 231 - 255 47 - 51 256 - 285 52 - 57 286 - 315 58 - 63 316 - 345 64 - 69 346 - 380 70 - 76 381 - 415 77 - 83 416 - 450 84 - 90 Annual 'Year of Principal Maturity Callable $ 15,000 1974 Non 15,000 1975 Non 15,000 1976 Non 15,000 1977 Non 15,000 1978 Non 20,000 1979 Non 20,000 1980 Non 20,000 1981 Non 20,000 1982 Non 25,000 1983~ Non 25,000 1984~ Non 25,000 1985 Non 25,000 1986 On or after 30,000 1987 7/1/1984 30,000 1988 " 30,000 1989 " 35,000 1990 " 35,000 1991 " 35,000 1992 " * First call date 4 12. Denominations. The Bonds shall be of the denomination of $1,000 or $5,000 each, "~s determined by the bid on which the Bonds are sold. If the bid of the successful bidder is silent as to the denom- ination of the Bonds, it shall be conclusively presumed that the bidder has elected to have the Bonds be of the denomination of $5,000 each. 13. Interest. The Bonds shall bear interest from their date until paid at the-rate of not to exceed seven percent (7%) per annum. Said interest shall be payable semiannually on the 1st days of January and July of each year to the date of maturity, except for the first coupons which shall be for interest from the date of the Bonds to January l, 1974. Attached to each Bond shall be interest coupons pay- able at the times the respective interest payments thereon become due and for the amounts thereof, as determined from the accepted bid for the purchase of the Bonds. 14. Interest After Maturity° If, upon presentation at maturity, or if redeemable and 'duly ca~led¥or redemption, payment of the Bonds or of any interest coupons thereon is not made in full accordance with the terms of this Indenture, said Bonds or coupons, or both, shall continue to bear interest at the rate stated in the Bond until paid in full. C. FORM, TERMS, NATURE, EXECUTION, DEL/VERY AND REGISTRATION OF BONDS 15. Form of Bonds and Coupons. The form of the Bonds and of the interest co--upons which shall be at[ached thereto at the time of their issuance, shall be substantially as provided in Exhibit "A" hereto attached and made a part hereof° 16 Where Payable. The principal and interest on the Bonds shall ~e p~-~ab'le 'in la-~ful money of the United States of America at the principal office of the Bank of America National Trust and Savings Association, San Francisco, California, herein appointed the Fiscal Agent of the Entity for the Bonds of this Issue, or at any other bank or trust company designated by said Fiscal Agent as a correspondent in the cities of New York, New York, Chicago, Illinois, or Los Angeles, California° 17. Source of Payment. The Bonds shall recite they are issued Bo~d L~w a~d that they are payable solely from the pursuant tU the Revenues. 18. Bonds Not a Debt. The Bonds and interest thereon shall not be a debt of the Entity, nor a charge, lien or encumbrance, legal or equitable, upon any of its property or upon any of its income or re- ceipts or revenues, other than the Revenues of the Enterprise which have been pledged to the payment thereof as herein provided. 19. ~redit Not Encumbered. No recourse shall be had for the payment of the-Bonds, or of the i~'~terest thereon, or any part thereof, against the General Fund of the Entity, nor shall its credit or taxing power be deemed to be pledged thereto, and the Holders of the Bonds, or the coupons thereon, shall never have the right to com- pel the exercise of the taxing power of the Entity or the forfeiture of any of its property for the payment of the Bonds or the interest thereon. 20. Bonds a Special Obligation. The Bonds of this Issue and all additional bonds which may be issued in accordance with the terms and conditions hereof shall be a special obligation of the Entity and shall be payable from and secured by a lien upon the Gross Revenues of the Enterprise as herein provided. 21. Negotiable Instruments. The Bonds are negotiable instruments and title thereto, unless regis'tered, shall pass by physical delivery thereof. The Holders of the Bonds shall have all of the rights possessed by holders of negotiable instruments payable to bearer. 22. Execution of Bonds° When the Bonds have been prepared in accordance with this Indenture, they shall be executed on behalf of the Entity and under its official seal by the Presiding Officer by his printed, engraved or lithographed facsimile signature and by the manual signature of the Clerk who shall affix thereto the corporate seal of the Entity, and the interest coupons shall be executed and authenticated by the printed, engraved or lithographed facsimile signature of the Finance Officer who by such signature shall ratify the execution of the same. The seal of the Entity may be affixed to the Bonds by a printed, lithographed or other reproduction thereof. 23. Continuing Validit~ of Signatures.. If any officer whose signature or countersignature appears on the Bonds or coupons ceases to be such officer before the delivery of the Bonds to the purchaser, his signature or countersignature is nevertheless as valid and suffi- cient for all purposes as if he had remained in office. 24. Delivery of Bonds. The Bonds shall be delivered to the pur- chasers thereof. The 'Enti~'~ shall deliver the Bonds upon receipt of the purchase price and shall credit the proceeds to the special fund and account for the payment of the cost of the Project, as provided herein, but the purchasers shall not be required to see to the proper application thereof° 25. Transcript. The Clerk is hereby authorized to prepare and furnish to the purchasers of the Bonds issued hereunder and attorneys examining the same a complete set of certified copies of all ordinances, resolutions and documents of the Entity relating to the Project and the Enterprise and to the issuance of Bonds and of all other proceedings and records of the Legislative Body showing the right, power and authority to issue the Bonds and to provide the security therefor, and such certified copies and certificates shall be deemed representations of the Legislative Body as to all facts stated therein. 26. Record of Bonds. The Fiscal Agent shall keep a record of the names of the purchasers of the Bonds and of all successive holders of the Bonds issued hereunder so far as such information is furnished to it, 27. Registration of Bonds. Any Bond is subject to registration either as to p¥incipal 'and int'eyest or as to principal only, upon written request of the Bondholder and presentation of the Bond to the Fiscal Agent for registration. a) Principal and Interest. Upon presentation and request for registration as to principal and interest, the Fiscal Agent shall cut off the coupons and destroy them. It shall maintain a book in which it shall enter the numbers of all registered Bonds and the names and addresses of the owners of registered Bonds. Until such registration is canceled as herein provided, the 6 interest and principal thereof shall be payable only to the 'registered owner. There shall be provided on the back of each Bond a suitable blank showing the name and address of the registered owner, the date of registration or transfer, the type of registration and the signature of the Fiscal Agent. b) ~ncipal Only. The Bonds may be registered as to principal y. When Bonds are registered as to principal only, a notation shall be made to that effect in the registra- tion book and on the Bond. The coupons shall not be detached and the interest on such Bonds shall be paid upon presentation of such coupons in the same manner as unregistered Bonds. Principal, however, shall be paid only to the registered owner upon presentation of such Bond. c) Deregistration. The registration of any unmatured Bond may be canceled upon written request of the registered owner. Upon receipt of such request, the Fiscal Agent shall cancel the registration in the bond registry book and on the back of the Bond, cause all unmatured coupons to be reprinted and reattached to the Bond, and deliver the Bond and attached coupons to the owner. Until such Bond is reregistered, the principal thereof shall be payable to bearer, and the interest shall again be paid upon surrender of proper coupons. The cost of reprinting the coupons shall be paid by the person requesting deregistration. d) Reregistration. Deregistered Bonds are subject to reregistra~ion in the same manner as previously unregistered Bonds. D. CALLABLE BONDS AND PROCEDURE 28. Callable Bonds. Bonds maturing by their terms on or before July l, 19~5 shall not We subject to call prior to their fixed maturity date. Bonds maturing on or after July l, 1986, shall, by their terms, be subject to call and redemption, at the option of the Entity, as a whole or in part, in inverse numerical order, on July l, 1984 (but not prior thereto) or on any interest payment date thereafter and prior to their maturity date or dates at the principal amount thereof and accrued interest to the date of redemption, plus a redemption premium equal to one-half of one percent (1/2 of 1%) of such principal amount plus one-quarter of one percent (1/4 of 1%) for each whole twelve months, and for any remaining fraction of a twelve (12) month period from the date fixed for redemption to the maturity date of the bonds; provided, however, that in no event shall the premium paid on prior redemption of any bond exceed the coupon rate applicable to said bond. 29. Notice of Redemptio_n_. At least thirty (30) days prior to the day of call of any Bonds, notice of redemption shall be published once in a financial paper published in San Francisco or New York, and such notice shall be mailed by registered mail to the last known Holder or Holders of any bearer Bonds so called, and to the registered owner or owners of registered Bonds° No interest shall accrue on said Bonds called for redemption or on any interest coupons thereon after the redemption date specified in said notice. 90. Form of Notice. The notice of redemption shall: a) State the redemption date. b) State the redemption price. c) State the numbers and dates of maturity of the Bonds to be redeemed; provided, however, that whenever any call in- cludes all of the Bonds of a maturity the numbers of the Bonds of such maturity need not be stated° d) Require that such Bonds be surrendered with all inter- est coupons maturing subsequent to the redemption date (except that no coupons need be surrendered on Bonds registered as to both principal and interest) at the office of the Fiscal Agent. e) Require that Bonds which at the time of call are registered so as to be payable otherwise than to bearer shall be accompanied by appropriate instruments of assignment to the Entity duly executed. f) Give notice that further interest on such Bonds will not accrue after the designated redemption date. B1. Receipt of Notice Unnecessary... The actual receipt by the Holder of any'Bond' of notice of Such redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest on the date fixed for redemption. 92. Certificate of Notice Conclusive. A certificate by the Finance Officer that nOtiCe of Call and redemption has been given to owners of Bonds as herein provided shall be conclusive as against all parties, and no Bondholder whose Bond is called for redemption may object thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that he failed to actually receive such notice of call and redemption. BB. Redemption Fund. Prior to the time the Legislative Body determines to call and 'r'¥deem any of the Bonds, the Finance Officer shall establish with the Fiscal Agent a redemption fund to be described and known as "(Name of Entity) 197B Sewer Revenue Bond Redemption Fund" hereinafter called "Redemption Fund". Prior to the publication of the notice of a redemption, there must be set aside in said Redemption Fund moneys available for the purpose and sufficient to redeem, at the premiums payable as herein provided, the Bonds designated in such notice of redemption. a) Use of Funds° Said moneys must be set aside in said fund solelY' for tha~ purpose and shall be applied on or after the redemption date to payment for the Bonds to be redeemed upon presentation and surrender of such Bonds and if not regis- tered all interest coupons maturing after the redemption date shall be used only for that purpose. b) Coupons Due. Any interest coupon due on or prior to the redemption date "Shall be paid from the Bond Fund provided in Section 44 upon presentation and surrender thereof. c) C.oupons Not Due° Each unregistered Bond presented shall have attached thereto or presented therewith all interest coupons maturing after the redemption date. 8 d) Retransferso If after all of the Bonds have been redeemed and canceled or paid and canceled, there are moneys remaining in said Redemption Fund, said moneys shall be trans- ferred to the Revenue Fund; provided, however, that if said moneys are part of the proceeds of refunding bonds, said moneys shall be transferred to the fund created for the payment of principal of and interest on such refunding bonds. B4. Effect of Notice of Redemption. When notice of redemption has been given substantially as pr~vi'd'e'd" in Section 29, and when the amount necessary for the redemption of the Bonds called for redemption is set aside for that purpose in the Redemption Fund, as provided in Section BB hereof, the Bonds designated for redemption shall become due and payable on the date fixed for redemption thereof, and, upon presentation and surrender of said Bonds and if not registered, all interest coupons maturing after the redemption date, to the Fiscal Agent, and, if any of said Bonds be registered, upon the appropriate assignment thereof, such Bonds shall be redeemed and paid at said r~- demption price out of the Redemption Fund. a) Interest Terminates. No interest will accrue on such Bonds called for redemption or on any interest coupons thereon after the redemption date specified in such notice, and the Holders of said Bonds so called for redemption after such redemption date shall look for the payment of such Bonds and the premium thereon only to said Redemption Fund. All Bonds redeemed and all interest coupons thereon shall be can- celed forthwith by the Fiscal Agent and shall not be reissued. b) Matured Coupons Payable. All interest coupons, per- taining to any redeemed Bonds, which coupons have matured on or prior to the time fixed for redemption, shall continue to be Payable to the respective Holders thereof but without inter- est thereon. All unpaid interest payable at or prior to the date fixed for redemption upon Bonds registered in such manner that the interest is payable only to the registered owners shall continue to be payable to the respective registered owners of such bonds, or their order, but without interest thereon. 35. Purchase of Bonds. The Entity may, from time to time, pur- chase in the open market any or all of the Bonds at prices offered, at or below the sum required to be paid in the event of redemption by call. All Bonds purchased or called shall be canceled and shall not again be reinstated. Eo ~JEDGE OF REVENUES AND FUNDS 37. Pledge of Revenues. All of the Revenues remaining after meeting the requirements of the Bonds of Prior Lien and any Indenture provided therefor, while such bonds are outstanding and unpaid, are hereby pledged to pay the principal of and interest on the Bonds of this Issue, and to provide: a) a Bond Fund; and b) a Reserve Fund; and thereafter, all of the Revenues are hereby pledged to pay the principal of and interest on the Bonds of this Issue, and to provide: 9 a) a Bond Fund; c) a Reserve Fund; operation and maintenance funds; and d) a Surplus Fund. 38. First Lien on Revenues. The sums required to meet the pay- ment of principal of and interes't on the Bonds of this Issue, while the Bonds of Prior Lien are outstanding and unpaid, shall be secured by a first and prior lien upon and pledge of all of the Gross Revenues re- maining after meeting the requirements of the Bonds of Prior Lien and any Indenture provided therefor, and when such bonds are no longer out- standing and unpaid, by a first and prior lien upon and pledge of all of the Gross Revenues° 39. Revenues a Trust Fund. The Revenues remaining after meeting the requirements of the Bonds of Prior Lien and any Indenture provided therefor, while such bonds are outstanding and unpaid, and thereafter, all of the Revenues, shall constitute a trust fund for the security and payment of the Bonds° While the Bonds of Prior Lien are outstanding and unpaid, there shall be paid from the Revenues prior to the payment of the principal of and interest on the Bonds of this Issue, and there- after, subsequent to the payment of the principal of and interest on the Bonds of this Issue, such sums as may be required to pay the costs of necessary and reasonable maintenance and operation of the Enterprise, which costs shall include the reasonable expenses of management, opera- tion, repair and other expenses necessary to maintain and preserve the Enterprise in good repair and working order; provided, that such costs and expenses may be paid from such sources of funds other than the Revenues as may be legally available for such purposes. 40° Equal Parity° All of the Bonds shall be equally and ratably secured without preference or priority by reason of number, date, date of sale, or of execution or of delivery of the Bonds, by said lien upon the Revenues of the Enterprise in accordance with the Bond Law and this Indenture. Said lien shall be prior and paramount to any and all other claims and obligations that have arisen or may arise or be incurred against the Revenues, but subject and subordinate to the prior lien and charge of the Bonds of Prior Lien, while such bonds are outstanding and unpaid, and except as otherwise herein provided. 41. Ratio of Net Revenue Coverage. The Entity covenants that it will at' all times establish, maintain and collect Charges suffi- cient, with other Revenues received, to provide a balance of Net Revenues after meeting the requirements of the Bonds of Prior Lien and any Indenture provided therefor, while such bonds are outstanding and unpaid, and thereafter Net Revenues, equal to not less than 1o30 times the aggregate amount of the principal of and interest on the Bonds of this Issue which shall become due and payable within the next succeeding twelve (12) months° 42. Proceeds of Bonds. There is hereby created a special fund to be designated "(Name of-Entity) 1973 Sewer Construction Fund", herein called "Construction Fund , which shall be maintained by the Finance Officer as a separate account, distinct from all other funds of the Entity. The proceeds of the Bonds, or any part thereof (other than any premium or accrued interest which shall be deposited in the Bond Fund) shall be deposited in said Fund and shall be expended as follows: l0 a) Reserve Fund. An amount equal to the average annual aggregate amount of p"~incipal and interest to accrue during the term of the Bonds, as determined by the successful bid therefor, shall be paid to the Fiscal Agent for deposit in the Reserve Fund. b) Acquisition Costs. The cost of acquiring any lands and easements' fOr t~'~ Pr6ject for which contracts have been or shall be made, or any interlocutory decree in eminent domain had and taken, shall be paid to the persons entitled thereto. c) Construction Costs. The costs of constructing the Project under contracts for honstruction work shall be paid to persons entitled thereto, on certificates of the Engineer as to the work completed substantially in accordance with the plans and specifications adopted by the Legislative Body there- for and as said certificates are approved by it. d) Incidental Expenses The incidental expenses of said proceedin'gs, consisting ~f all engineering, inspection, legal and fiscal fees and the costs of authorizing and issuing the Bonds as approved by the Legislative Body shall be paid to those persons entitled thereto or to the appropriate Entity fund to be reimbursed therefor. e) Bond Fund. Any remaining balance shall be trans- ferred to the Bond Fund. Interest on the Bonds from their date to date of delivery and any premium on their sale shall be deposited in the Bond Fund. 43° Revenue Fund° The heretofore created "(Name of Entity) I 73 Sewer Revenue Fund", hereafter to be known as the "(Name of 9 . ,, " Fund" Entity) Sewer Revenue Fund , and herein called Revenue , shall continue to be maintained and operated by the Finance Officer as a separate account, distinct from all other funds of the Entity, into which shall be paid on or before the first day of each month follow- ing the receipt thereof, the Revenues. While the Bonds of Prior Lien are outstanding and unpaid, said Fund shall be administered and disbursements made therefrom as in any Indenture provided for the Bonds of Prior Lien, and thereafter, so long as any Bonds of this Issue or any additional bonds authorized hereunder are outstanding or any interest thereon is unpaid, in the manner and in the order progressively set forth in Sections 44, 45, 46 and 47 hereof° 44. Bond Fund. There is hereby created a special fund desig- nated "(Name of E'n~ity) 1973 Sewer Revenue Bond Fund", herein called "Bond Fund", which shall be maintained and operated by the Fiscal Agent as a separate account distinct from all other funds of the Entity, to cover the payment of the principal of and interest on the Bonds of this Issue. a) Forthwith, upon the receipt Of the proceeds of the Bonds of this Issue, the Finance Officer shall pay therefrom to the Fiscal Agent for deposit in the Bond Fund any funds received on account of interest accrued on said Bonds from their date to the date of their delivery, and any premium on their sale. ll b) While the Bonds of Prior Lien are outstanding and unpaid, the moneys in the hereinafter referred to Surplus Fund, subject to the prior lien and claim thereon of such bonds, and thereafter, the moneys in the Revenue Fund, shall be paid and disbursed, as follows: i. On the first day of each calendar month, beginning with the date of the Bonds, and after any moneys therein have been applied, the Finance Officer shall pay to the Fiscal Agent for deposit in the Bond Fund an equal aliquot part of the amount necessary to pay the next maturing install- ment of interest on the Bonds; and ii. On the first day of each calendar month beginning twelve (12) months prior to the first maturity of the Bonds, the Finance Officer shall pay to the Fiscal Agent for deposit in the Bond Fund an equal aliquot part of the aggregate yearly amount necessary to pay the next maturing installment of principal of the Bonds. Any amount required to be set aside, transferred to and placed in the Bond Fund may be prepaid in whole or in part by being earlier set aside, transferred to and placed in the Bond Fund, and in that event the monthly transfer which has been so prepaid need not be made at the time appointed therefor. In any event at least one month prior to the due date of any maturity or installment of princi- pal of or interest on the Bonds all sums required for the payment thereof must be in such Bond Fund in cash. All moneys in this Fund shall be used and withdrawn solely for the purpose of paying the principal of and interest on the Bonds as the same shall become due and payable° After full payment of the Bonds and interest, any balance in the Fund shall be returned to the Revenue Fund. 45. Reserve Fund. There is hereby created a special fund '~ it designated (Name of Ent y) 1973 Sewer Revenue Bond Reserve Fund", herein called "Reserve Fund", which shall be maintained by the Fiscal Agent, as a separate account, distinct from all other funds of the Entity, to further secure the payment of the principal of and interest on the Bonds. a) Forthwith upon receipt of the proceeds of the Bonds of this Issue the Finance Officer shall pay from the Construc- tion Fund to the Fiscal Agent for deposit in the Reserve Fund an amount equal to the average annual aggregate amount of principal and interest to accrue during the term of the Bonds, as determined by the successful bid therefor. b) Whenever any moneys are withdrawn from the Reserve Fund to pay the principal and interest of Bonds, the amount so withdrawn shall be restored from available funds in the Surplus Fund, subject to the prior lien and claim thereon of the Bonds of Prior Lien while such bonds are outstanding and unpaid, prow[ded that if there are no funds therein available therefor after the Bonds of Prior Lien are no longer outstanding and unpaid, then by monthly transfers from the Revenue Fund on the first day of each calendar month after such withdrawal in the sum of not less than $1,000 or an amount equal to one-half the net surplus for the prior monthly service collection period, whichever shall be greater, 12 until there has been restored therein the gross amount provided therefor in subdivision (a) of this Section. Money in the Reserve Fund shall be used solely for the pur- pose of paying the principal of and interest on the Bonds in the event that the moneys in the Bond Fund are insufficient therefor and for that purpose may be withdrawn and transferred to the Bond Fund. After reach- ing the year of maximum debt service of the Bonds, moneys in said fund in excess of an amount equal to the principal and interest to accrue during the current fiscal year may be transferred from the Reserve Fund to the Bond Fund. The moneys in the Reserve Fund shall be transferred to the Bond Fund at the times and for the purposes necessary to pay the last remaining installments of principal and interest of the Bonds. Any balance thereafter shall be transferred to the Revenue Fund. 46. Maintenance and Operation Funds. While the Bonds of Prior Lien are ou'tsta~ding an'd' unpaid, moneys for maintenance and operation shall be paid and disbursed as in any Indenture provided for the Bonds of Prior Lien, and thereafter, the Finance Officer shall pay from the moneys remaining in the Revenue Fund the necessary and reasonable expenses of management, operation, maintenance, repair, and other expenses necessary to maintain and preserve the Enterprise; provided, that in the event the Legislative Body exercises its power in any year to provide for the payment of such expenses from sources of funds legally available therefor other than Revenues, including but not limited to taxes, such expenses for said year need not be paid from the Revenue Fund but shall be paid from the sources of funds so pro- vided. 47~ Surplus Fund. The heretofore created "(Name of Entity) 1966 Sewer ReVenue' go'nd Surplus Fund", hereafter to be known as the "(Name of Entity) Sewer Revenue Bond Surplus Fund", and herein called "Surplus Fund", shall, while the Bonds of Prior Lien are outstanding and unpaid, be operated and maintained by the Finance Officer as in any Indenture~provided for the Bonds of Prior Lien. Thereafter, the Finance Officer shall continue to operate and maintain said Fund, and shall transfer monthly all moneys remaining in the Revenue Fund over and above the amounts transferred or disbursed under Sections 44, 45, and 46 hereof, excepting the sum of $10,000 which shall be maintained in the Revenue Fund to cover unforeseen expenditures for the remainder of said month, and the moneys in this Fund may be used for any of the following purposes: a) To pay the cost of unusual or extraordinary maintenance of or repair to the Enterprise; b) To improve the Enterprise; c) To pay the principal of and interest on the Bonds of this Issue; d) To pay the principal, interest and premiums of Bonds of this Issue called prior to maturity; e) To pay the principal, interest and premiums of Bonds purchased in the open market at prices offered at or below the sum required to be paid in the event of redemption by call; 13 f) To pay the principal and interest of general obligation sewer bonds heretofore or hereafter issued for sewer purposes; g) To pay 'the principal and interest of sewer revenue bonds which may hereafter be issued, of equal parity or subordinate as to the lien thereof to the lien of the Bonds of this Issue, and the premium upon any of such Bonds called or purchased prior to maturity; and h) For any other lawful purpose. No moneys shall be otherwise paid or transferred therefrom unless all of the requirements of this Indenture then required to be performed have been fully accomplished. 48. Feedin$ Higher Priorit[o In the event that the balance in any fund is below its requirements, moneys from a fund of lower priority shall be transferred up to fill such deficiency in said fund, and said higher fund shall have a first claim on the moneys of said lower fund for said purpose. 49. Investment of Surplus Funds. All moneys that are not re- quired to be used within such time may be invested in authorized negotiable direct obligations of the United States of America, maturing not more than the following period with moneys of the following funds: a) Bond Fund - one hundred days; b) Construction Fund - one hundred days; c) Reserve Fund - twelve years for 75% of the money and one year 25% thereof; d) Surplus Funds - five years. d 50° Inactive Deposits° Any moneys not then needed may be eposited as inactive funds of the Entity. 50-A. Sufficiency of Revenues. The Charges now established for the services or facilities of the Enterprise are reasonable and may be substantially increased without affecting detrimentally or at all the inexhaustible and unlimited nature of the rate and amount of the Charges which the Entity has the power to establish and collect. As now established, the Charges produce and will continue to produce Gross Revenues sufficient not only for the requirements of the Bonds of Prior Lien, but also for the Bonds of this Issue, and further, to pay all other obligations which have been incurred or will be incurred by the Entity for the Enterprise. 50-Bo No Restriction on Other Powers° Nothing in this Indenture nor in any Indenture providing for the Bonds of Prior Lien, shall be construed to prevent the Entity from exercising any powers which it may otherwise have, nor prevent the Entity from paying the costs of maintenance and operation from such funds other than those mentioned herein or in said Indentures, as are legally available for such pur- pose, including taxes. 14 50-C. Collection of Revenues. In the event the Entity elects to collect the Revenues in such a manner as to make them available less frequently than monthly, all provisions of this Part E which provide for monthly fund transfers shall be deemed modified to con- form to the revenue collection period. F. COVENANTS BY THE ENTITY 51. Covenants. For the protection and security of the Bonds, the Entity covenants and agrees to and with the Holders of the Bonds as provided in this Part Fo 52. Acquire Pro~ect. It will commence the acquisition, con- struction and completion of the Project and continue the same with ali. practical dispatch and in a sound and economical manner. 53. Operate Enterprise. It will operate the Enterprise in an efficient and economical manner and prescribe, revise and collect such Charges in connection therewith that the services and facilities of the Enterprise may be furnished at the lowest possible cost consistent with sound economy and prudent management. 54. Good Repair. It will operate, maintain, preserve and keep the Enterprise and every part thereof in good repair, working order and condition. ' 55. Preserve Security. It will preserve and protect the security of the Bonds and the rights of the Holders thereof, and warrant and defend such rights against the claims and demands of all persons whomsoever. 56° Collect Revenues. It will collect and hold in trust the Revenues and other funds pledged to the payment of the Bonds and apply such Revenues or other funds only as provided by this Indenture. 57° Service Bonds° It will pay and cause to be paid punctu- ally the principal of the Bonds and the interest thereon on the date or dates and at the place or places and in the manner mentioned in the Bonds and in the coupons thereto appertaining and in accordance with this Indenture. 58. Pay Claims~ It will pay and discharge any and all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien or charge upon the Revenues of the Enterprise, or any part of said Revenues, or any funds in the hands of the Finance Officer or Fiscal Agent prior or superior to the lien of the Bonds or which might impair the security of the Bonds, to the end that the priority and security of the Bonds shall be fully preserved and pro- tectedo · 59. Encumbrances° It will not mortgage or otherwise encumber, sell, lease or dispose of the Enterprise or any part thereof, nor enter into any lease or agreement which would impair or impede the operation of the Enterprise or any part thereof necessary to secure adequate Revenues for the payment of the principal and interest of the Bonds, or would otherwise impair or impede the rights of the Holders of the Bonds with respect to such Revenues or the operation of the Enterprise without provision for the retirement of the Bonds of this Issue then outstanding from the proceeds thereof; provided, however, that material and equipment worn out or not needed for the 15 efficient and proper operation of the Enterprise may be sold without the consent of the Bondholders if the proceeds thereof are applied to the improvement or extension of the Enterprise or to the retire- ment of the Bonds of this Issue or the Bonds of Prior Lien. 60. No Free Service. It will not permit any part of the Enter- prise to be used or take~ advantage of free of charge by any person, firm or corporation or by the State of California or the United States of America, or by any public corporation, political subdivision, city, county, district or agency of either, including this Entity. 61. No Competition~ It will not acquire, construct, operate or maintain, and not Permi~ any other public ormprivate corporation or agency or any persons whatsoever to acquire, construct, operate or maintain within its boundaries or within any part thereof, any system or utility competitive with the Enterprise° 62. Insurance° It will procure and keep in force insurance upon all buildings a'nd Ytructures of the Enterprise and the machinery and equipment therein, which are usually insured by entities operating like property, in good and responsible insurance companies. The amount of the insurance shall be such as may be required to adequately protect it and the Holders of the Bonds from loss due to any such casualty, and in the event of any such loss the proceeds shall be used to repair ar restore the Enterprise or for the payment of the Bonds. 65. Fidelity Bonds. It will procure suitable fidelity bonds covering all of its 0ffi"cers and other employees charged with the operation of the Enterprise and the collection and disbursement of Revenues therefrom. 64. Engineers. It will employ consulting engineers of acknowl- edged repu~ skill and experience in the construction and opera- tion of the Enterprise or any unusual or extraordinary items of extensions or betterments as shall be required from time to time, all reports, estimates and recommendations of such consulting engineers to be filed with the Clerk and furnished to the purchasers of the Bonds issued hereunder if requested. 65. Audit an~_Repor%o It will employ a certified public accountant'who shall prepare and file with the Finance Officer, the F~.scal Agent, and with the State Treasurer, Districts Securities Division, if the Bonds shall at any time be certified by it, and make available to the purchaser of the Bonds if requested, annually within one hundred twenty (120) days after the close of each fiscal year on June 30th, commencing in the year 1974, an annual audit for the preceding year which shall include: a) Balance Sheet. A balance sheet including balances of all fun~ated' b) Revenue and Payments. A statement in detail of the cash re~~ a'6d dis"burs~ments of the income and expenses of the Enterprise. c) Insurance. A statement as to the insurance carried by it, inciuding a brief description of each policy as to its coverage and name of company issuing it. d) Customers. The number of customers classified by rate or-~or service groups, the number of properties 16 apply the Revenues of the Enterprise as herein required, or otherwise to do or perform any of the covenants, conditions or agreements in this Indenture contained. 71-A. Arbitra~eo The District hereby covenants to the purchasers of the Bond~, and their successors in interest, that it will make no use of the proceeds of said Bonds at any time during the term thereof Which, if such use had been reasonably expected at the date the Bonds were issued, would have caused them to be arbitrage bonds within the meaning of Section 103(d) of the United States Internal Revenue Code of 1954 and the applicable regulations of the United States Treasury Department. Go ADDITIONAL AND REFUNDING BONDS 72° Additional Bonds. No additional bonds shall be issued or other obligations incurred which shall be payable from the Revenues and constitute a lien thereon which, shall have priority over the Bonds of this Issue. The Entity may issue additional bonds payable as to principal and interest from the Revenues on a parity with the Bonds of this Issue for the purpose of improving the Enterprise or for acquir- ing, constructing or improving additions, extensions or betterments to the Enterprise or for the purpose of refunding any outstanding bonds issued for the Enterprise or for any combination of such purposes and subject to the conditions provided in this Part G. 73. Default. The Entity shall not at the time of the issuance of such additiona~----~ bonds be in default hereunder unless the bonds are for refunding such defaulted obligation. 74~ Terms° Such additional bonds shall mature on January 1 or July i in each y----~ear; the final maturity date of the additional bonds shall be not earlier than the finaI maturity date of any bonds then outstanding; and fixed serial maturities or minimum annuai sinking fund payments or .any combination thereof shall be established in amounts sufficient to provide for the payment and retirement of all such additional bonds on or before their respective maturity dates. 75° Net Revenues. The annual Net Revenues of the Enterprise for the latest Fiscal year-or Bond Year prior to the issuance of such addi- tional bonds, after having deducted therefrom the principal and inter- est payments required to be paid for said year on the Bonds of Prior Lien, while such bonds are outstanding and unpaid, as shown by an audit, certificate or opinion of an independent certified public accountant employed by the Entity, plus the additional Net Revenues, estimated as provided in Section 76, shall have produced the following sums: a) During Term of Bonds of Prior Lien. If such addi- tional bon~'s are issued during the term of the Bonds of Prior Lien, one and thirty-hundredths (1.30) times io the average annual amount of the principal of and interest on the then outstanding Bonds of this Issue and any additional parity bonds issued pursuant hereto to accrue during the term of the Bonds of Prior Lien, plus ii. the average annual amount of the principal of and interest on the additional bonds then proposed to be issued to accrue during the term of the Bonds of Prior Lien, plus iii° the average annual amount of any minimum annual sinking funds required to be transferred under the terms of the Indenture providing for the issuance of said proposed addi- tional bonds to accrue during the term of the Bonds of Prior Lien~ 18 connected to the Enterprise and the number of applications for services on hand but not connected. e) Billing° The annual billings and the average monthly billing per user. f) Rate Schedule. The schedules of the rates and charges prescribed by bhe rate ordinance then in effect. g) Recapitulation. A recapitulation of funds and accounts created by thi§' Indenture into which are put moneys derived from the operation of the Enterprise and from the sale of the Bonds, which shall show balances at the beginning of the period, deposits and withdrawals made during the period and balances at the end of the period; and also monthly deposit requirements for funds during the next succeeding fiscal year. h) Comments. Comments of the accountant relative to the fulfillment of the provisions of this Indenture and the manner in which the Enterprise has been operated, and his recommendations for improving the operation of the Enterprise. 66. Unconditional 0bligatio~. Except only as provided herein for alterat"ion of the Bonds or this Indenture, nothing in this Inden- ture or in the Bonds or in the coupons contained shall affect or impair the obligation of the Entity, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Holders of the Bonds and coupons at the respective dates of maturity, or upon prior redemption, as herein provided, and out of the Revenues herein pledged for such payment, or affect or impair the right of action, which is also absolute and unconditional, of such Holders to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and coupons. 67. Performance of Essence. The performance of the duties prescribed in this Indenture and' in the Bond Law by the Entity or its proper officers, agents or employees, is of the essence of Entity's contract with the Bondholders. 68. Recourse to Bond Law. Each taker and subsequent holder of the Bonds and attached or deta'ched coupons has recourse to all of the provisions of this Indenture and of the Bond Law and is bound by their terms. 69. Indenture is Covenant. Each and all of the terms of this Indenture Shall be and constitute a covenant on the part of the Entity to and with each and every Bondholder from the time the Bonds are issued hereunder. 70. Continuing Agreement. This Indenture and the covenants, agreements, prOviSionS and con'ditions herein contained, constitute a continuing agreement with the Holders of all of the Bonds issued or to be issued hereunder and then outstanding, to secure the full and final payment of the principal of and premiums, if any, and the inter- est on all Bonds which may from time to time be executed and delivered hereunder. 71. Period of Agreement. Whenever all of the Bonds and all interest then accrued thereo~ shall have been fully paid and dis- charged, the agreements in this Indenture contained shall cease and terminate, and the Entity shall be under no further obligation to l? b) After Term of Bonds of Prior Lien. If such addi- tional bonds are issued subsequent to the term of the Bonds of Prior Lien, one and thirty-hundredths (1.30) times A. i. the average annual amount of the princi- pal of and interest on the then outstanding Bonds of this Issue and any additional parity bonds issued pursuant hereto to accrue during their term, plus ii. the average annual amount of the princi- pal of and interest on the additional bonds then proposed to be issued to accrue during their proposed term, plus iii° the average annual amount of any minimum annual sinking funds required to be transferred under the terms of the Indenture providing for the issuance of said proposed additional bonds to accrue during their proposed term; or ' Bo i. the average annual amount computed under subdivision A(i) of Part (b) of this Section, plus iio the average annual amount of that part of the sums provided in subdivisions A (ii) and A(iii) of Part (b) of this Section which will accrue during the terms of the then outstanding Bonds of this Issue and any addi- tional parity bonds issued pursuant hereto, whichever shall be the lesser amount° 76. Estimated Additional Net Income. The Net Revenues esti- mated as provided in Section 75 may be revised and enlarged in a written report of an independent engineer or the Entity engineer, as approved by a certificate or opinion of an independent certified public accountant, to include any or all of the following: a) Additional Connections° The Net Revenues of the additional number of users connected to the Enterprise at the time of the issuance of said report, had such users been connected to the Enterprise for the entire fiscal or Bond Year used for the audit, certificate or opinion referred to in Section 75. b) ~cquisitionso The Net Revenues to be derived from the users connected to a sewer system or facilities to be acquired by the Entity from the proceeds of the additional bonds° c) Construction° Seventy-five percent (75%) of the additional Net Revenues estimated to be produced by the construction of the Project for which additional bonds are to be issued, or by the construction from other available in any twelve (12) months period out of the twenty- revenues, four (24) months next succeeding. d) Rate Increase. Seventy-five percent (75%) of the additional revenues estimated to be derived from any increase in Charges made by the Entity which have not been reflected in the audit, certificate or opinion for the full Fiscal or Bond Year covered therein° 19 77° Refunding Bonds° In the event and to the extent that addi- tional bonds are to be issued for the purpose of refunding and retir- ing any Bonds of this Issue, or of the Bonds of Prior Lien, for the purpose of the calculations required under this Part G, the amounts of annual principal, interest and minimum sinking funds required to have been paid on the bonds to be refunded, as provided in Section 75, need not be taken into consideration in computing the coverage for such additional bonds° 78. Subordinate Lien Bonds° Nothing in this Indenture shall be deemed to limit or restrict 'the'"power of the Entity to issue such additional bonds payable from but inferior as to the lien of any of the then outstanding Bonds of this Issue on the Revenues without com- pliance with the provisions of this Part G or of any other provisions of this Indenture° 79° Issuance of Refunding Bonds. The Legislative Body may, with the consenb' of the Holder of any noncallable Bond, and without the consent of the Holder of any callable Bond, refund said Bond as pro- vided by lawo The refunding bond shall be on a parity of lien with the refunded Bond, providing that the principal and the installments of interest thereof shall not increase any annual installment of prin- cipal and interest of the Bonds more than the minimum coverage ratio provided herein. Nothing herein shall prohibit the Legislative Body from issuing such refunding bonds subordinate as to the lien of the Bonds and of bonds subsequently issued and payable from the same Revenue. For the purpose of curing a default or threatened default the Legislative Body may issue additional Bonds of this Issue and exchange such bonds for maturing or matured Bonds or sell them and use the proceeds thereof to pay said Bonds, provided that the new bonds shall be made to mature after the maturity of the Bonds and not later than forty (40) years from the date of the Bonds° 80° Amount of Refunding Bonds° Funding or refunding bonds may be issued in a principal amoun'f sufficient to provide funds for the payment of all of the following: a) All Bonds to be funded or refunded by them. b) All expenses incident to the calling, retiring, or paying of the outstanding Bonds and the issuance of the funding or refunding bonds, including the difference in amount between the par value of the funding or refunding bonds and any amount less than that for which the funding or refunding bonds may be soldo c) Interest upon the funding or refunding bonds from the date of sale to the date of payment of the Bonds to be funded or refunded out of the proceeds of the sale or the date upon which the Bonds to be funded or refunded will be paid pursuant to the call or an agreement with the Holders of such Bonds° d) Any premium necessary in the calling or retiring of the outstanding Bonds and the interest accruing on them to the date of the call or retirement. 81. Refunding Bonds of Prior Lien° Nothing in this Indenture shall be deemed to limit or restrict the powers of the Entity to re- fund all or any of the Bonds of Prior Lien pursuant to any Indenture therefor or applicable law to be secured by a lien on the Revenues of equal parity to that now existing therefor° 2O 82° Deficiency Bonds. If the proceeds of the Bonds for any reason are less than ~he ~ost of the Project, additional bonds may in like manner be issued and sold to provide for the amount of the deficit but not to exceed the amount necessary to complete the Project accord- ing to the original plans and specifications. Such deficiency bonds shall be deemed to be the same in all respects as the original issue, and shall be entitled to payment, without preference or priority over the Bonds first issued, and shall be disposed of in like manner. 83° Independent Certified Public Accountant means any registered or licensed certified public accountant or firm of such certified pub- lic accountants duly licensed or registered or entitled to practice and practicing as such under the laws of the State of California, appointed and paid by the Entity, and who, or each of whom: a) is in fact independent, and not under domination of the Entity; b) does not have any substantial interest, direct or indirect, with the Entity; c) is not connected with the Entity as an officer or employee of the Entity, but who may be regularly retained to make annual or other similar audits of the books of the Entity. 84. Independent Engineer means any individual or firm of engineers having special knowledge and experience in the field of sanitation, appointed and paid for by the Entity and who, or each of whom: a) is in fact independent and not under domination of the Entity; b) does not have any substantial interest, direct or indirect, with the Entity; c) is not connected with the Entity as an officer or employee of the Entity, but who may be regularly retained to make annual or other periodic reports to the Entity. Ho MODIFICATIONS AND AMENDMENTS 85. Modifications. All of the provisions of this Indenture shall const'itute a contract between the Entity and the Holder or Holders of the Bonds. From and after the sale and delivery of any of the Bonds, no amendment, alteration or modification of the Bonds or of the coupons appertaining thereto or of this Indenture, which shall impair, impede or lessen the rights of the Holders of the Bonds or the coupons appertaining thereto then outstanding shall be made withoUt the prior written consent, or, alternatively, the prior con- sent given at a Bondholders' meeting, of the Holders of at least sixty-six and two-thirds percent (66-2/3%) of the aggregate principal amount of Bonds then outstanding, unless such amendment, alteration or modification be herein authorized° Any such amendment, alteration or modification which shall have received the consent of the Holders of said percentage of said outstanding Bonds as provided in this Sec- tion shall be binding on the Holders of all of the Bonds and coupons appertaining thereto, either attached to or detached from said Bonds. 21 86. Calling Bondholders' Meeting. If the Entity shall desire to or shall be required ~o obtain the'''consent of the Bondholders to a proposed action, the Legislative Body may adopt a resolution calling a meeting of the Bondholders for the purpose of considering the action, the consent to which is desired or required. 87. Notice of Meeting° Notice specifying the purpose,~iace, date and hour of such meeting shall be given by mail thirty ( days prior thereto and in addition shall be published once thirty ) days prior thereto in a financial paper published in San Francisco or New York. Such notice shall set forth the nature of the proposed action, consent to which is desired or required. The Finance Officer shall mail such notice by registered mail to the last known Holder or Holders of bearer Bonds, as shown by the records thereof, and to the registered owners of any registered Bonds at their addresses shown on the bond registry books~ The place, date and hour of holding such meeting and the date or dates of publishing and mailing such notice shall be determined by the Legislative Body in its discretion. 88. Notice Conclusive. The actual receipt by any Bondholder of any not~ce required to Ye given by Section 87 of this Indenture shall not be a condition precedent to the undertaking, notice of which is required to be given, and failure to receive such notice shall not affect the validity of the proceedings thereat or prevent the notice from having the effect intended by the giving of notice; provided that notice has been published and has also been mailed to Bondholders to the extent known to the Finance Officer. No irregu- larity in the form of said notice shall affect its validity provided notice has been given and it shall not be open to any Bondholder to show that he failed to receive notice. 89. Voting Qualifications. Any Holder of a bearer Bond may, prior to any sUch meeting, deliver such Bond to any agency designated by the Entity for the purpose, and shall thereupon be entitled to receive a receipt for the Bond so deposited, calling for the re- delivery of such Bond, or of a certificate of deposit thereof, satis- factory to the Finance Officer, executed by a bank or trust company, at any time after the meeting. The Finance Officer shall prepare and deliver to the chairman of the meeting a list of the names and ad- dresses of the registered owners of the Bonds as shown on the bond registry books, together with a statement of the maturities, series and numbers of the Bonds held by each of such registered Bondholders, and, to the extent known by him, a list of the names and addresses of the owners of bearer Bonds deposited with the aforesaid agency, to- gether with a statement of the maturities, series and numbers of the Bonds held and deposited by each of such Bondholders, and no Bond- holder shall be entitled to vote at such meeting unless his name appears upon such lists or unless, at the meeting, he shall present his Bond or Bonds or such certificate of deposit thereof. No Bond- holder shall be permitted to vote with respect to a larger aggregate principal amount of Bonds than is set against his name on such lists, unless he shall produce the Bonds upon which he desires to vote or such certificate of deposit. 90. Attendance and Voting by Proxy. Attendance and voting by Bondholder~ at 's~ch meeting may be by p~"oxyo Owners of registered Bonds may, by an instrument in writing under their hands, app'oint any person as their proxy to vote at any meeting for them, an~ such instrument when presented at such meeting shall be sufficient to entitle such person to vote as the proxy of said registered owner. Any person may vote as the proxy of the owner of a bearer Bond on presentation of such Bond, certificate of deposit thereof and an instrument in writing under the hand of the Bondholder appointing such person as his proxy to vote at such meeting for him, or if such instrument in writing has been delivered to the agency designated by the Entity at the time the Bond was delivered to such agency as pro- vided for in Section 89 of this Indenture and such person's name appears on the list delivered by the Finance Officer to the chairman of the meeting as the proxy of the owner of such bearer Bond. 91. Quorum and Procedure. A representation of at least sixty- six and tw6~thirds percent (6'6-2/B%) in aggregate principal amount of the Bonds then outstanding, shall be necessary to constitute a quorum at any meeting of Bondholders, but less than a quorum may adjourn the meeting, from time to time, and the meeting may be held as so adjourned without further notice, whether such adjournment shall have been had by a quorum or by less than a quorum. The Legislative Body shall, by an instrument in writing, appoint a tempo- rary chairman of the meeting, and the meeting shall be organized by the election of a permanent chairman and a secretary. At any meeting, each Bondholder shall be entitled to one vote for every $1,000 prin- cipal amount of Bonds with respect to which he shall be entitled to vote as aforesaid. The Legislative Body, by its duly authorized representative, may attend any meeting of the Bondholders, but shall not be required to do so. 92. Vote Required. At any such meeting held as aforesaid, there shall be ~ubmitte'd for the consideration and action of the Bondholders a statement of proposed action, consent to which is desired or required, and if such action shall be consented to and approved by the Bondholders in person or by proxy holding at least sixty-six and two-thirds percent (66-2/3%) in aggregate amount of the Bonds then outstanding, the chairman and the secretary of the meeting shall so certify in writing to the Legislative Body, and such certificate signed by the chairman and secretary of any such meeting shall be conclusive evidence and the only competent evidence of the matters stated in the certificate relating to the proceedings taken at such meeting, as against all parties. 93. Filing Certificate. The certificate shall be filed in the office bf the Fi'na~'Ce Officer and shall be kept on file so long as any of the Bonds and the interest thereon are outstanding and unpaid. A duplicate original, if there is one, and, if not, then a reproduced copy thereof including the signatures thereon, shall be filed with the Clerk who shall likewise keep it filed with the papers of the proceedings authorizing the issuance of the affected Bonds. Io EVENTS OF DEFAULT AND REMEDIES 94. Event of Default. One or more of the following events (herein called "events of default") shall constitute an event of default: a) Principal. If default shall be made in the due and punctual 'Payment of the principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise; or b) Interest. If default shall be made in the due and punctual payment of any installment of interest of any Bond when and as such interest installment shall become due and payable; or c) Covenants. If default shall be made in the observatio~ of any of the covenants, agreements or condi- tions on its part herein or in the Bonds contained, and such default shall have continued for a period of thirty (BO) days; or d) Bankruptcy. If the Entity shall file a petition or answer 'Seeking rleorganization or arrangement under the Federal Bankruptcy laws or other applicable laws or statutes of the United States of America, or if a court of competent Jurisdiction shall approve a petition, filed with or with- out the consent of the Entity, seeking reorganization under the Federal Bankruptcy laws or any other applicable laws or statutes of the United States of America, or if, under the Federal Bankruptcy laws or the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Entity Qr of the whole or any substantial part of its property. 95. Acceleration. In each and every event of default, the Holders of'not less than sixty-six and two-thirds percent (66-2/5%) in aggregate principal amount of the Bonds at the time outstanding shall be entitled, upon notice in writing to the Entity, to declare the principal of all of the Bonds then outstanding hereunder and the interest accrued thereon to be due and payable immediately, and upon any such declaration the same shall become and shall be immedi- ately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding. 96. Application of Funds. When acceleration has been de- clared under SeCtion 9'5 hereof, the Revenues shall be applied as set forth in this Section: a) Bonds of Prior Lien Outstanding and Not in Default. If any of the Bonds of Prior Lien are outstanding and no'~ ~ in default under any Indenture provided therefor, all sums then or thereafter in the Bond and Reserve Funds herein provided for the Bonds of this Issue and, subject to the prior lien and claim of said Bonds of Prior Lien, in the Surplus Fund shall be applied in the order set forth in subdivisions (i), (ii), (iii) and (iv) of subdivision (c) hereof; b) Bonds of Prior Lien Outstanding and in Default. If any of Yhe Bonds of prior LieJn are outstanding and then in default under any Indenture provided therefor, and ac- celeration has been declared under said Indenture, the sums remaining after application thereof under said Indenture, including all sums thereafter received, and the sums in the Bond and Reserve Funds herein provided shall be applied in the order set forth in subdivisions (i), (ii), (iii) and (iv) of subdivision (c) hereof; C) After Term of Bonds of Prior Lien. Subsequent to the term of the Bonds of Pribr Lien,1 all of the Gross Revenues of the Enterprise, including all sums in all of the funds provided for in any Section hereof upon the date of the happening of any event of default and all sums there- after received by the Entity hereunder shall be applied by it in the following order: i. Costs and Expenses.° To the payment of the costs and expenses Yf 'the Bondholders in declaring such event of default, including reasonable compensation to their agents, attorneys and counsel, and to the payment of the costs and expenses of the Finance Officer in carrying out the provi- sions of this Section, including reasonable compensation to his agents, attorneys and counsel° iio Interest on Undue Bonds. In case the prin- cipal of the Bon-~S~a~l not have become due and shall not then be due and payable, to the payment of the interest in default in the order of the maturity of the installments of such interest, with interest on the overdue installments at the same rate, such payments to be made ratably to the per- sons entitled thereto without discrimination or preference. iii° Principal and Interest on Due Bonds. In case any principal of the Bonds shall have become "and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon the Bonds for the principal and interest, with interest on the overdue principal and install- ments of interest at the same rate. iv. Insufficient Funds. In case such moneys shall be insufficient to paY' in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such principal and interest without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other install- ment of interest, ratably to the aggregate of such princi- pal and interest then due° d) Procedure for Application to Bonds. No applica- tion of funds to the Bonds of' this IsSUe Sh~ll be made except upon presentation of the several Bonds and coupons, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid. 97. Refunding Defaulted Bonds. The Entity may refund any de- faulted Bond by the issuance of a 'new bond maturing after the maturity of the last Bond issued hereunder~ but otherwise on a parity as to payment of interest with the Bonds issued hereunder, and with the consent of the Holder thereof, exchange such Bonds for such matured Bond, or, without his consent, issue and sell said refunding bond and pay said defaulted bond, and in such event such action shall be deemed to cure such default hereunder. 98° Bondholder Remedies. Subject to any contractual limita- tions binding upon the HOlde'~'s of any of the Bonds (including but not limited to, any limitations upon the exercise of any remedy to the Bondholders holding a specific proportion or percentage of such Bonds), any Holder of Bonds shall have the right, for the equal benefit and protection of all Holders of Bonds similarly situated, in addition to those provided in the Bond Law: a) Acco~tingo By action or suit in equity to require the Enti~y"~nd its Legislative Body and other officers, agents and employees to account as the trustee of an express trust. b) Injunction. By action or suit in equity to enjoin any acts or things 'ghich may be unlawful or in violation of the rights of the Bondholders. 25 c) Mandamus. By mandamus or other suit, action or proceeding at l'a~ or in equity to enforce his rights against the Entity and its and any of its officers, agents, and employees, and to compel it or them to perform and carry out its and their duties and obligations under the law and its and their covenants and agreements with Bondholders as provided herein. 99. Nature of Remedies° As to remedies to the Bondholders: a) Cumulative. No remedy conferred hereby or by the law upon any Holder of Bonds is intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and wi. thout regard to any other remedy conferred hereby or by the law or by any other law. b) Waiver. No waiver of any default or breach of duty or contract by any Bondholder shall extend to or shall affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereof. c) Delays. No delay or omission of any Bondholder to exercise 'any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence thereof. d) Enforcement. Every substantive right and every remedy conferred upon the Bondholders may be enforced and exercised from time to time and as often as may be deemed expedient° e) Status Quo. In case any suit, action or proceed- ing to enforce any right or exercise any remedy shall be brought or taken and then discontinued or abandoned, or shall be determined adversely to the Bondholders, then, and in every such case, the Entity and such Bondholders shall be restored to their former positions and rights and remedies as if no such suit, action or proceedings had been brought or taken. J. FISCAL AGENT 100. Fiscal Agen____~to The Entity hereby appoints the Bank of America National Trust and Savings Association, principal office, San Francisco, California, as the Fiscal Agent for this Issue of Bonds for the purpose of paying the principal of and interest on any of the Bonds presented for payment and for the purpose of performing all other duties assigned to or imposed upon it as herein provided. 101. AcceptanC~o The Entity and the Fiscal Agent have entered into an agreement by the terms of which the Fiscal Agent is obligated to perform the duties imposed on it by the terms of this Indenture. 102o Resignation. Any Fiscal Agent appointed hereunder may resign at any time. Upon the merger, consolidation, or other re- organization of any Fiscal Agent, the Legislative Body shall appoint a new Fiscal Agent which may be the corporation resulting from said reorganization. 26 10~. ReMoval° The Fiscal Agent initially appointed, and any successor ~--~~, may be removed by the Entity and a successor appointed; provided, that each such successor shall be a bank or trust company having trust powers doing business in and having an office in the State of Calmiforniao 104. Continued Service° Any such Fiscal Agent designated by the Entity-~'~~inue ~o be the Fiscal Agent of the Entity for all said purposes until the appointment and qualification of a successor as such Fiscal Agent, and the Entity agrees that it will maintain a Fiscal Agent within the State so long as any of the Bonds are outstand- ing and unpaid~ 105~ Funds~ The Fiscal Agent is hereby authorized and directed to keep the a~co~n~,s and make ~the transfers of funds in the manner herein provided~ and disburse all sums required for the payment of the principal, of and interest on the Bonds presented for payment at maturity~ or on redemption prior to maturity. 106. Bond Red~. The Fiscal Agent is hereby authorized to redeem sai~ ~-~-~nd thy interest coupons pertaining thereto when duly presented to it for payment at maturity and to cancel all Bonds and coupons upon payment thereof and to return them so canceled to the Finance Officer. 107. Records. The Fiscal Agent shall keep accurate records of all funds ~tered by it and of all Bonds and coupons paid and discharged by it. 108. Compensation. The Legislative Body is hereby authorized to compensA-~.e~-~~al Agent for the services rendered as such pursuant to the provisions of this Indenture. 109. R__es_~onsibilities. The recitals of facts and all promises, covenants and agreement~erein and in the Bonds of said authorized issue contained shall be taken as statements, promises, covenants and agreements of the Entity, and the Fiscal Agent assumes no responsi- bility for the correctness of the same, and makes no representations as to the validity or sufficiency of this Indenture or of the Bonds or coupons, and shall incur no responsmbmlm Y in respect thereof, other ~than in connection with the du'ties or obligations herein or in the Bonds~assigned to or imposed upon the Fiscal Agent. The Fiscal Agent shall be under no responsibility or duty with respect to the issuance of the Bonds for value. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or default. The Fiscal Agent shall not be required to bring any action to require the performance of any obli- gation hereunder. /S/ Robert W. Fesler Presi-d~n~ Bo-a~d---0~ Directors o~---~ ATTEST: South Tahoe Public Utility District Is/ David W. Callahan Clerk and ~e-~-o ic~6 Secre ary EXHIBIT "A" UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF EL DORADO SOUTH TAHOE PUBLIC UTILITY DISTRICT SEWER REVENUE BOND OF 1973 No. KNOW ALL MEN BY THESE PRESENTS, that the South Tahoe Public Utility District, a public corporation, in the County of E1 Dorado, State of California, hereinafter referred to as "District", for value received, has obligated itself to pay to the bearer (or if this bond is registered, to the registered owner hereof), from its 1973 Sewer Revenue Bond Fund, on the 1st day of July 19 , the sum of THOUSAND DOLLARS, with interest thereon from--~e at the rate of % per annum, as evidenced by interest coupons attached hereto at the t~-~e of issuance, said interest payable January l, 1974 and semiannually thereafter on the 1st day of July and the 1st day of January in each year, all as more particularly set forth in the ordinance providing for the issuance of this bond. If, upon presentation at maturity, or if redeemable and duly called for redemption, payment of this bond or any interest coupon thereof, or both, is not made in full accordance with the terms of the ordinance providing for the issuance hereof, said bond or coupon, or both, shall continue to bear interest at the rate stated herein until paid in full. The holder of this bond has all the rights of a negotiable instru- ment payable to bearer. Bonds maturing by their terms on or before July l, 1985, shall not be subject to call prior to their fixed maturity date. Bonds maturing on or after July l, 1986 shall, by their terms, be subject to call and redemption, at the option of the District, as a whole or in part, in inverse numerical order, on July l, 1984 (but not prior thereto) or on any interest payment date thereafter and prior to their maturity date or dates at the principal amount thereof and accrued interest to the date of redemption, plus a redemption premium equal to one-half of one percent /1/2 of 1%) of such principal amount plus one-quarter of one percent%1/4 of 1%) for each whole twelve (12) months, and for any remaining fraction of a twelve (12) month period from the date fixed for redemption to the maturity date of the bonds; provided, however, that in no event shall the premium paid on prior redemption of any bond exceed the coupon rate applicable to said bond. At least thirty (30) days prior to the day of call of any bonds, notice of redemption shall be published once in a financial paper published in San Francisco or New York, and such notice shall be mailed by registered mail to the last known holder or holders of any bearer bonds so called, and to the registered owner or owners of registered bonds. No interest shall accrue on said bonds called for redemption or any interest coupons thereon after the redemption date specified in said notice. The District may also, from time to time, purchase any or all of said outstanding bonds at prices offered, at or below the sum required to be paid in the event of redemption by call. All bonds purchased or called will be canceled and will not again be reissued. i Both principal and interest are payable in lawful money of the United States of America at the principal office of the Bank of America National Trust and Savings Association, San Francisco, California' the fiscal agent of the District, or at any other bank or trust company designated by said fiscal agent as a correspondent in the cities of New York, New York, Chicago, Illinois, or Los Angeles, California. This bond is one of an issue in the total principal amount of $450,000, all of like date and tenor except as to number, maturity, prior redemption (and interest rate), all issued by the District for the purpose of providing money to finance a project consisting of addi- tions and improvements to an enterprise consisting of the District sewer system, as set forth and described in Ordinance No. 295 entitled n Ordinance Providing for the Issuance of Sewer Revende Bonds, Fixing the Form of Bonds and Providing Covenants for Their Protection, Sewer Revenue Bonds of 197~", adopted on June 7, 197~, to which reference is hereby made for the obligations, duties, rights and privileges hereby created, and as authorized by law and in strict accordance with Chapter 5, Part ~, Division 5 of the Health and Safety Code of the State of California, commonly referred to as the Sewer Revenue Bond Act of 19~, and Resolution No. 1802, entitled "A Resolution of Intention to Acquire and Construct Sewer Pumping Station and Interceptor Sewer and to Issue Sewer Revenue Bonds to Cover the Cost Thereof", adopted by the Board of Directors of the South Tahoe Public Utility District on May l?, Both principal and interest are payable solely from the revenues of the enterprise hereinabove referred to and the District is not obli- gated to pay the principal hereof or interest hereon except from the revenues of said enterprise. The bonds constitute a first and prior lien upon said revenues except that additional bonds may be issued on a parity of lien in accordance with the ordinance hereinbefore referred to. Said lien is, however, subject and subordinate to the prior charge and lien of the bonds of prior lien (consisting of the outstanding and unpaid Sewer Revenue Bonds of 1966 and Sewer Revenue Bonds of 1967) and any indenture provided therefor. All of the revenues to be derived from the sewer service charges received for and all other income and receipts derived from the opera- tion of or arising from the enterprise and the services or facilities thereof, including revenues from improvements, additions and exten- sions thereto which may hereafter be constructed or acquired, and from other charges, are pledged to pay the principal of and interest on the bonds, and to provide (1) a bond fund, (2) a reserve fund, (~) opera- tion and maintenance funds, and (4) a surplus fund, as provided in said ordinance, subject, however, to the prior charge and lien of said bonds of prior lien, and any indenture provided therefor. This bond is subject to registration as to principal and interest upon written request of the owner and presentation of the bond to the fiscal agent for registration. Thereafter, the principal hereof and interest hereon shall be payable only to such registered owner. Bonds may also be registered as to principal only, in which event the coupons shall not be ~emoved. Registered bonds may be deregistered and again become ~ayable to bearer. The District has created a special sewer revenue bond fund for the payment of said principal and interest and has agreed to set aside periodically in said fund, commencing with the date hereof, an equal aliquot part necessary to pay interest which shall become due on the next Succeeding interest payment date, and, commencing twelve (12) months prior to the first maturity of the bonds~ an equal aliquot part of the amount necessary to pay the installment of principal which shall fall due at the next ensuing principal payment date. ii For the further protection of the payment of the bonds and the interest thereon when due, the District has created a special sewer revenue bond reserve fund, into which it has agreed to pay from the proceeds of the bonds and to maintain therein an amount equal to the average annual aggregate amount of principal and interest to accrue during the term of the bonds, which fund shall be used solely as a guarantee for the payment of'the principal of and interest on said bonds. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of California to be done, to happen and to be performed precedent to and in the issu- ance of this bond have been done, have happened and have been performed in regular due form, time and manner as required by law~ that the District is authorized by law to operate the enterprise herein referred to and the board of directors, by ordinance duly adopted, has estab- lished and has covenanted to maintain rates and charges for services or facilities thereof sufficient, with other revenues received, after having paid therefrom all funds required for said bonds of prior lien, to provide net revenues equal to not less than 1.30 times the combined aggregate amount of principal and interest which, shall become due and payable within the next succeeding twelve (12) months on all of the bonds then outstanding. IN WITNESS WHEREOF, the South Tahoe Public Utility District, by its board of directors, has caused this bond to be executed in its behalf and under its official seal by its president, by his printed, lithographed or engraved facsimile signature hereon, and by the manual signature of its clerk, and has caused the interest coupons to be executed and authenticated by the facsimile signature of its treasurer, all as of September l, 1973. President of South Ta oe PubliC Utility District Clerk ' Interest Coupon Form. form: The coupons shall be in the following iii FORM OF COUPON SOUTH TAHOE PUBLIC UTILITY DISTRICT EL DORADO COUNTY, CALIFORNIA SEWER REVENUE BOND OF 1973 The sum shown hereon is payable to bearer (unless registered) in lawful money as interest (subject to any prior redemption right reserved) at the principal office of the Bank of America NoTo & S.A., San Francisco, California, the fiscal agent of the District, or the designated correspondent hank at New York~ New York, Chicago, Illinois, or Lps Angeles, California. Dated: September 1, 1973. On Coupon No. Bond No. 1, Treasurer Registration Form. The form of endorsement on the Bonds for registratiOn~shail b'e'""~s follows: This bond is registered in the name of the registered owner whose name and address appear last in the space below and both the Principal of and interest on this bond are payable tO such registered owner, unless it is registered as to prin- cipal only, in which case only the principal is so payable. NOTE: There must be no writing in the space below except by the fiscal agent. Date ~f Type of Name of' Address of Signature of Registry Registration* Registered Owner Registered Owner Fiscal Agent Principal only and Interest Principal only and Interest Principal only and Interest * In the event registration is as to principal only, strike the words "and interest"; if as to principal and interest, strike the word "only". iv I hereby certify that the foregoing Ordinance was duly and regularly introduced and adopted by the Board of Directors of the South Tahoe Public Utility District, E1 Dorado County, California, at a meeting thereof duly held on the 7th day of June, 1973, by the following vote: AYES, Directors: Fesler, Wakeman, Kortes, and Hegarty NOES, Directors: None ABSENT, Directors: None Ream L Cler~ 'aha - ' ry