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HomeMy WebLinkAboutResolution 16-82 t ATASCADERO COUNTY SANITATION DISTRICT RESOLUTION NO. 16-82 RESOLUTION PROVIDING FOR THE ISSUANCE OF $1,300,000 PRINCIPAL AMOUNT OF ATASCADERO COUNTY SANITATION DISTRICT 1982 SEWER REVENUE BONDS AND PRESCRIBING THE TERMS, CONDITIONS, DATE, .FORMS, MATURITIES, REDEMPTION PROVISIONS AND RATE OF INTEREST ON SAID BONDS WHEREAS, the Board of Directors of the Atascadero County Sanitation District on August 7, 1978 duly passed and adopted a resolution calling a special revenue bond election to be held in the District on November 7, 1978 (to be consolidated with the State of California General Election) for the purpose of submitting to the qualified voters of the District the measure (hereinafter set forth) to issue $1,300,000 principal amount of sewer revenue bonds under the Revenue Bond Law of 1941; and WHEREAS, all requirements of law have been complied with in calling and holding said special revenue bond elec- tion and the Board of Directors of the District did duly and regularly confirm the canvass of the returns of said election and did by said confirmation determine and declare, and does hereby certify, that said measure received at said special revenue bond election the affirmative votes of a majority of all the voters voting on said measure at said election and said measure was thereby carried and adopted by said election and the issuance of said sewer revenue bonds by the District for the purpose described in said measure was duly autho- rized; and WHEREAS, the Board of Directors of the District has determined that the public interest and necessity demand the acquisition and construction of the wastewater treatment improvements described in said measure; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Atascadero County Sanitation District, as follows: Section 1. Definitions. The terms hereinafter in this section defined shall, for all purposes of the Resolu- tion and of any Supplemental Resolution and of the Bonds, and of any certificate, opinion or other document herein men- tioned, have the meanings herein specified: (a) "Board" means the Board of Directors of the District or any other governing board of the District here- after provided for pursuant to law. (b) "Bonds" means the $1,300,000 principal amount of Atascadero County Sanitation District 1982 Sewer Revenue Bonds authorized by and at any time outstanding pursuant to the provisions and subject to the limitations of the Resolution. "Bonds" also means any additional sewer revenue bonds (in addition to said $1,300,000 principal amount of Bonds) hereafter authorized pursuant to the Law and at any time outstanding pursuant to the provisions and subject to the limitations of the Resolution. (c) "District" means the Atascadero County Sanitation District, located in San Luis Obispo County, California. (d) "Enterprise" means the existing sewer system of the District to be improved with the proceeds of sale of the Bonds, and all facilities hereafter acquired or 2 constructed for said sewer system, and all additions, betterments, extensions or improvements to said sewer system or any part thereof hereafter made. (e) "Fiscal Year" means the period beginning on July 1 of each year and ending on the next succeeding June 30. (f) "Holder" means any person who shall be the bearer of any outstanding coupon Bond that is not registered or the registered owner of any outstanding coupon Bond that is registered or the registered owner of any outstanding installment Bond. (g) "Law" means the Revenue Bond Law of 1941, being Title 5, Division 2, Part 1, Chapter 6 of the Cali- fornia Government Code. (h) "Maintenance and operation costs of the Enter- prise" means the reasonable and necessary costs of maintain- ing and operating the Enterprise, calculated on sound accounting principles, including (among other things) the cost of collecting, treating and disposing of sewage, reasonable expenses of management, repair and other expenses necessary to maintain and preserve the Enterprise in good repair and working order, and reasonable amounts for admini- stration, overhead, insurance, taxes (if any) and other similar costs, but excluding in all cases depreciation and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. (i) "Maximum Annual Debt Service" on the Bonds or any portion thereof means the maximum amount payable on such Bonds in any Fiscal Year (beginning with the Fiscal Year in which such calculation is made and ending with the Fiscal Year in which the last of such Bonds by their terms mature) 3 on account of interest plus serial maturities of principal of such Bonds. (j ) "Net Revenues" means all Revenues during any period with respect to which the term is used after deduct- ing therefrom all maintenance and operation costs of the Enterprise during such period. (k) "Paying Agent" means the principal office of Bank of America National Trust and Savings Association in San Francisco, California. (1) "Resolution" means this Resolution. (m) "Revenues" means all gross income and revenues of any kind, howsoever derived, from the funds, services and facilities of the Enterprise, including all fees, tolls, rates and other charges, and all gross revenues of all addi- tions, betterments, extensions and improvements to the Enterprise hereafter acquired or constructed, together with any interest earned thereon, excepting all connection charges and refundable deposits made to establish credit. (n) "Sewer service" means the sewer service furnished or made available by the Enterprise. (o) "Supplemental Resolution" means any resolution adopted by the Board amendatory of or supplemental to the Resolution, but only if and to the extent that such Supple- mental Resolution is specifically authorized hereunder. (p) "Treasurer" means the Treasurer of San Luis Obispo County, California. Section 2. Due Authorization and Purpose of Issue. (a) The Board has reviewed all proceedings hereto- fore taken relative to the authorization of the Bonds and has found, as a result of such review, and does hereby find and 4 determine that 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, happened and been per- formed in due time, form and manner as required by law, and the District is now authorized, pursuant to each and every requirement of law, to issue the Bonds in the manner and form as in the Resolution provided. (b) The Bonds shall issue for the purpose set forth in the following measure: MEASURE (B) : Shall Atascadero County Sanitation (Wastewater Treat- District issue revenue bonds in ment Improvements- the principal amount of $1,300,000 Revenue Bonds) pursuant to the Revenue Bond Law of 1941 to provide funds for the acquisition and construction of wastewater treatment improve- ments, comprising a new sewage pump station, forcemain modi- fications, an oxidation lagoon system, a chlorine/contact tank and effluent lift station and septage receiving and treatment facilities, together with necessary pumps, valves, control facilities and machinery and lands and easements therefor, and other works, property or structures necessary or convenient for wastewater treatment improvements for Atascadero County Sanitation District? (c) It is hereby found and determined that the District now owns and operates a sewer system; that the wastewater treatment improvements to said sewer system described in said measure, when acquired and constructed, will serve to make said sewer system a complete sewer system for the District; that the proceeds of sale of the Bonds shall be applied to the payment of the costs of such acquisition and construction; and that the Net Revenues to be derived from said sewer system shall be pledged to the payment of the Bonds. It is hereby found and determined that the acquisition and construction of said wastewater treatment improvements to said sewer system is necessary to enable the District to exercise its public powers and functions, namely, 5 to furnish sufficient sewer service for all present and future beneficial uses of the District. Accordingly, it is found and determined as follows: (i) Said wastewater treatment improvements to said sewer system can be acquired and constructed from the proceeds of sale of the Bonds and otblar available funds; (ii) Sewer service charges can be fixed and levied and can be collected upon said sewer system for the sewer service; (iii) Said sewer service charges, together with all other Revenues, shall constitute the Revenues of the Enterprise which shall be used for the payment of the maintenance and operation costs of the Enterprise and for the payment of the principal of and interest on the Bonds and otherwise as herein provided; (iv) The Net Revenues of the Enterprise are hereby pledged to the payment of the principal of and interest on the Bonds as herein authorized; and (v) All Revenues of the Enterprise received from and after the date hereof shall be accounted for through the Sewer System Revenue Fund provided for in Section 6(b) hereof. (d) In consideration of the acceptance of the Bonds by those who shall hold the same from time to time, the Resolution shall be deemed to be and shall constitute a contract between the District and the :solders from time to time of the Bonds and interest coupons appertaining thereto; and the covenants and agreements herein set forth to be performed on behalf of the District shall be for the equal 6 and proportionate benefit, security and protection of all holders of the Bonds and interest coupons without preference, priority or distinction as to security or otherwise of any of the Bonds or interest coupons over any of the others by reason of the number or date, thereof or the time of sale,, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. Section 3 . The Bonds. (a) The Bonds in the aggregate principal amount of One Million Three Hundred Thousand Dollars ($1, 300,000) are hereby authorized to be issued by the District under and subject to the terms of the Resolution. The Bonds shall be dated June 1, 1982, and shall bear interest at the rate of five per cent (5%) per annum, payable annually the first year on June 1, 1983 and semiannually thereafter on December 1 and June 1 in each year. Both the principal of and interest on the Bonds shall be payable at the office of the Paying Agent in lawful money of the United States of America. The Bonds shall be numbered consecutively upwards in order of maturity, shall be in the denomination of Five Thousand Dollars ($5,000) each, and shall mature in consecutive numerical order, from lower to higher, as set forth in the following schedule: 7 Principal Maturity Date (June 1) Amount (both years inclusive) $10,000 1984-1985 15,000 1986-1992 20,000 1993-1997 25,000 1998-2001 30,000 2002-2005 35,000 2006-2008 40,000 2009-2011 45,000 2012-2013 50,000 2014-2015 55,000 2016-2017 60,000 2018-2019 65,000 2020 70,000 2021 75,000 2022 Bonds maturing by their terms on or prior to June 1, 1992 shall not be subject to redemption prior to their fixed maturity dates. Bonds maturing by their terms on or after June 1, 1993 shall be subject to redemption prior to their fixed maturity dates, at the option of the District, on June 1, 1992, but not prior thereto, and on any interest payment date thereafter prior to maturity, as a whole or in part in inverse numerical order, at the principal amount thereof and accrued interest thereon to the date of re- demption. Whenever funds are available for the call and redemption of any of the Bonds then subject to call and redemption, the Treasurer shall determine the numbers of the Bonds to be called and redeemed, and the date of redemption thereof. Notice of any such redemption shall be published by the District once a week for two (2) successive weeks in a newspaper of general circulation printed and published in San Luis Obispo County, California. The notice of redemption shall set forth the Bond numbers and principal amount of the 8 Bonds so to be called and redeemed. Similar notices shall be mailed at the same time by the District to the respective registered owners of any Bonds called for redemption at their addresses appearing on the registration books maintained by the Treasurer; provided that such mailing shall not be a condition precedent to such redemption and failure to mail or receive any such notice shall not affect the validity of the proceedings for the redemption of such Bonds. The first publication of such notice of redemption shall be not less than thirty (30) nor more than sixty (60) days prior to the date fixed for such redemption. After the date fixed for such redemption, if the District shall have duly published notice of such redemption and shall have provided the Paying Agent with funds available for payment of the principal and accrued interest on the Bonds so called, interest on such Bonds shall cease. All Bonds and the coupons attached thereto surrendered upon call for redemption shall be cancelled by the District and shall not be reissued. (b) Except as otherwise provided in Section 3(c) of the Resolution, the Bonds shall be issued as coupon bonds payable to bearer, shall be numbered 1 to 260, both inclu- sive, and shall bear interest from their date. The interest coupons attached to the Bonds issued in coupon form shall be numbered in consecutive numerical order, and each such coupon shall represent six months' interest, except the first such coupon which shall represent twelve months' interest, on the Bond to which it is attached. The Bonds issued in coupon form and the interest coupons to be attached thereto shall be substantially in the following forms, to wit: 9 [FORM OF COUPON BOND] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF SAN LUIS OBISPO ATASCADERO COUNTY SANITATION DISTRICT 1982 SEWER REVENUE BOND No. $5,000 The ATASCADERO COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the Constitution and laws of the State of California (herein called the "District" ) , for value received hereby promises to pay (but only out of the Net Revenues hereinafter referred to) to the bearer hereof, or if this Bond is registered to the registered owner hereof (subject to any right of prior redemption hereinafter reserved) , on June 1, , the principal sum of FIVE THOUSAND DOLLARS ($5,000) together with interest thereon from the date hereof until the principal hereof shall have been paid, at the rate of five per cent (5%) per annum, payable annually the first year on June 1, 1983 and semiannually thereafter on December 1 and June 1 in each year. Unless this Bond is registered, interest due on or before the maturity of this Bond shall be payable only according to the tenor, and upon presentation and surrender, of the annexed interest coupons as they severally become due. Both the principal hereof and interest hereon are payable at the principal office of Bank of America National Trust and Savings Association in San Francisco, California, in lawful money of the United States of America. This Bond is one of a duly authorized issue of Atascadero County Sanitation District 1982 Sewer Revenue Bonds (herein called the "Bonds" ) , aggregating One Million Three Hundred Thousand Dollars ($1,300,000) in principal amount, all of like tenor and date (except for such variations, if any, as may be required to designate varying numbers and maturities) , and is issued pursuant to the Constitution and laws of the State of California, including the Revenue -Bond Law of 1941 (herein called the 79Law" ) , and pursuant to Resolution No. 82- adopted by the Board of Directors of the District on April 26, 1982 (herein called the "Resolution" ) , and the vote of the qualified voters of the District voting at a special election duly called and held for the purpose of authorizing the issuance of the Bonds. Reference is hereby made to the Resolution, to any 10 resolutions supplemental thereto and to the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Net Revenues, as that term is defined in the Resolution, and the rights of the bearers and registered owners of the Bonds and of the bearers of the appurtenant coupons; and all the terms of the Resolution and the Law are hereby incorporated herein and constitute a contract between the District and the bearer or registered owner from time to time of this Bond, and to all the provisions thereof the bearer or registered owner of this Bond, by his acceptance hereof, consents and agrees. Each bearer or registered owner hereof and of said coupons, whether said coupons are attached hereto or detached here- from, shall have recourse to all of the provisions of the Law and the Resolution and shall be bound by all of the terms and conditions thereof. Bonds maturing by their terms on or prior to June 1, 1992 are not subject to redemption prior to their fixed maturity dates. Bonds maturing by their terms on or after June 1, 1993 are subject to redemption prior to their fixed maturity dates, at the option of the District, on June 1, 1992, but not prior thereto, and on any interest payment date thereafter prior to maturity, as a whole or in part in inverse numerical order, at the principal amount thereof and accrued interest to date of redemption. The Bonds are issued to provide funds for the acquisition and construction of improvements to an Enterprise, consisting of the sewer system of the District, as more particularly described in the Resolution. The Bonds are special obligations of the District and are payable, as to the principal thereof and interest thereon, from the net revenues of said Enterprise (which, as more particularly defined in the Resolution, are therein and herein called the "Net Revenues" ) . All the Bonds are equally secured by a pledge of, and charge and lien upon, the Net Revenues, and the Net Revenues constitute a trust fund for the security and payment of the interest on and principal of the Bonds. Additional sewer revenue bonds payable from the Net Revenues may be issued on a parity with the Bonds of this authorized issue, but only subject to the conditions and limitations contained in the Resolution. The principal of and interest on this Bond are payable solely from the Net Revenues, and the District is not obligated to pay it except from the Net Revenues. The general fund of the District is not liable, and the credit or taxing power of the District is not pledged, for the payment of the Bonds or their interest. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encum- brance upon, any of the property of the District or any of its income or receipts, except the Net Revenues. The District covenants that, so long as any of the Bonds are outstanding, it will fix, prescribe and collect rates, fees and charges in connection with the services and facilities furnished by said Enterprise so as to yield Net Revenues at least equal to the amounts thereof prescribed by 11 the Resolution and sufficient to pay the principal of and interest on the Bonds in accordance with the provisions of the Resolution. This Bond is negotiable and transferable by deliv- ery unless registered as to principal and interest in the manner provided by law, and thereafter the principal hereof and interest hereon shall be payable only to the registered owner. The rights and obligations of the District and of the bearers and registered owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Resolution. It is hereby certified that all of the conditions, things and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due time, form and manner as required by law and that the amount of this Bond, together with all other indebtedness of the District, does not exceed any limit prescribed by the Constitution or laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Resolution. IN WITNESS WHEREOF, the Atascadero County Sanitation District has caused this Bond to be executed under its official seal, signed by the President of its Board of Directors and countersigned by the Secretary of its Board of Directors, and has caused the interest coupons attached hereto to be signed by said Secretary, and has caused this Bond to be dated June 1, 1982. President of the Board of Directors of Atascadero County Sanitation District [SEAL] Countersigned: Secretary of the Board of Directors of Atascadero County Sanitation District 12 [FORM OF COUPON] Coupon No. On 1, The ATASCADERO COUNTY SANITATION DISTRICT will (unless the within-mentioned bcnd is registered, and subject to any right o'' prior redemption reserved therein) pay to bearer at the principal office of Bank of America National Trust and Savings Associ- ation, in San Francisco, California, the sum shown hereon in lawful money of the United $ States of America, being interest then due on its Atascadero County Sanitation District 1982 Sewer Revenue Bond, dated No. June 1, 1982. Secretary of the Board of Directors of Atascadero County Sanitation District 13 (c) Notwithstanding anything to the contrary herein contained, the initial purchaser of the Bonds may elect to receive, in lieu of coupon bonds as provided in Section 3(a) , a single fully registered bond, maturing in installments, issued pursuant to this subsection. Such installmen': bond shall be numbered R1, shall bear interest determined on the aggregate of payments therefor from the respective dates thereof, as said payments and the dates thereof are endorsed thereon by the Treasurer, and shall mature in installments in the years and amounts specified in Section 3(a) for the coupon bonds in lieu of which such installment bond is issued. The respective installments of principal of such installment bond shall be subject to redemption or prepayment prior to maturity to the extent, at the times, in the manner and at the prices set forth in Section 3(a) for the coupon bonds in lieu of which such installment bond is issued, except that such installment bond need not be surrendered in the case of redemption in part, and except that no publication of notice of redemption shall be required and notice of redemption of any installment shall be sufficiently given if mailed to the registered owner thereof, at his address appearing upon the registration books maintained by the Treasurer, not less than thirty (30) nor more than sixty (60) days prior to the date fixed for such redemption. Such installment bond may be transferred by the registered owner thereof and its transfer noted on the rcgis•- tration books maintained by the Treasurer, but only if such transfer relates to the entire principal amount of such installment bond. The person in whose name such installment 14 bond shall be registered shall be deemed the owner thereof for all purposes of the Resolution, and payment of or on account of the principal of or interest on such installment bond shall be made only to or upon the order in writing of such registered owner. Such installment bond shall be exchangeable at any time after June 1, 1983 at the expense of the District, upon ninety (90) days' notice given by the registered owner thereof and upon surrender of such installment bond at the office of the Treasurer, for coupon bonds in the form set forth in Section 3(b) in an aggregate principal amount equal to the unpaid principal amount of such installment bond. Such coupon bonds shall mature on the respective maturity dates of the unpaid installments of principal as they become due on such installment bond, and shall have attached thereto coupons representing interest from the date to which interest has previously been paid on such installment bond. Such installment bond so surrendered shall be cancelled by the District and shall not be reissued. The Bond issued as an installment bond shall be substantially in the following form, to wit: 15 [FORM OF INSTALLMENT BOND] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF SAN LUIS OBISPO ATASCADERO COUNTY SANITATION DISTRICT 1982 SEWER REVENUE BOND No. R1 $1, 300,000 The ATASCADERO COUNTY SANITATION DISTRICT, a county sanitation district organized and existing under the Constitution and laws of the State of California (herein called the "District" ) , for value received hereby promises to pay (but only out of the Net Revenues hereinafter referred to) to or registered assigns (subject to any right of prior redemption hereinafter reserved) , the principal sum of not to exceed ONE MILLION THREE HUNDRED THOUSAND DOLLARS ($1,300,000) on June 1 in the years and installments as follows: Principal Maturity Date (June 1) Amount (both years inclusive) $10,000 1984-1985 15,000 1986-1992 20,000 1993-1997 25,000 1998-2001 30,000 2002-2005 35,000 2006-2008 40,000 2009-2011 45,000 2012-2013 50,000 2014-2015 55,000 2016-2017 60,000 2018-2019 65,000 2020 70,000 2021 75,000 2022 together with, interest on the unpaid balance hereof from the date of each advance hereof (as set forth on the reverse hereof) until the principal hereof shall have been paid, at the rate of five per cent (5%) per annum, payable annually the first year on June 1, 1983 and semiannually thereafter on December 1 and June 1 in each year. Both the principal installments of and interest on this Bond are payable in 16 lawful money of the United States of America by check mailed by the principal office of Bank of America National Trust and Savings Assocation, in San Francisco, California, to the registered owner at his address as it appears on the books of registration herein referred to; except that the final installment due on this Bond shall be paid only upon surrender hereof. The aggregate principal amount of this Bond shall not exceed the aggregate payments herefor, as said payments and the dates thereof are endorsed hereon by the County Treasurer of San Luis Obispo Ccunty. Interest on this Bond shall be determined on the aggrec•ate of payments for ` this Bond from the respective dates thereof, as said payments and the dates thereof are endorsed on this Bond by said County Treasurer. This Bond is one of a duly authorized issue of Atascadero County Sanitation District 1982 Sewer Revenue Bonds (herein called the "Bonds" ) , aggregating One Million Three Hundred Thousand Dollars ($1,300,000) in principal amount, and is issued as an installment bond in lieu of coupon bonds of such issue, all of like tenor and date (except for such variations, if any, as may be required to designate varying numbers and maturities) , and is issued pursuant to the Constitution and laws of the State of California, including the Revenue Bond Law of 1941 (herein called the "Law" ) , and pursuant to Resolution No. 82- adopted by the Board of Directors of the District on April 26, 1982 (herein called the "Resolution" ) , and the vote of the qualified voters of the District voting at a special election duly called and held for the purpose of authorizing the issuance of the Bonds. Reference is hereby made to the Resolution, to any resolutions supplemental thereto and to the Law for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Net Revenues, as that term is defined in the Resolution, and the rights of the bearers and registered owners of the Bonds and of the bearers of the appurtenant coupons; and all the terms of the Resolution and the Law are hereby incorporated herein and constitute a contract between the District and the registered owner from time to time of this Bond, and to all the provisions thereof the registered owner of this Bond, by his acceptance hereof, consents and agrees. Each registered owner hereof shall have recourse to all of the provisions of the Law and the Resolution and shall be bound by all of the terms and conditions thereof. In addition to the installments of principal required to be paid by the District as hereinabove set forth, the District shall have the right to prepay, on any interest payment date on or after June 1, 1992, the entire principal amount hereof then remaining unpaid, or such lesser portion thereof as it may determine in inverse chronological order of said installments and in multiples of Five Thousand Dollars ($5,000) , at the principal amount of such prepayment plus accrued interest to the date of prepayment. This Bond shall be registered as to principal and interest in an appropriate book at the office of the County Treasurer of San Luis Obispo County, in San Luis Obispo, 17 California, and in the space provided on the back of this Bond. This Bond is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at the office of said County Treasurer. No transfer of this Bond shall be valid until it has been duly entered in said book and duly noted in the appropriate space on the back of this Bond. As provided in the Resolution, this Brand is ex- changeable at the sole expense of the District at any time after June 1, 1983, upon ninety (90) days' notice, at the request of the registered owner hereof and upon surrender of this Bond to the District at the office of said County Treasurer, for negotiable coupon bonds, registrable only as to both principal and interest, in an aggregate principal amount equal to the unpaid principal amount of this Bond and maturing as the installments thereof are herein scheduled to be paid, and in the form of coupon bonds provided for in the Resolution. The Bonds are issued to provide funds for the acquisition and construction of improvements to an Enterprise, consisting of the sewer system of the District, as more particularly described in the Resolution. The Bonds are special obligations of the District and are payable, as to the principal thereof and interest thereon, from the net revenues of said Enterprise (which, as more particularly defined in the Resolution, are therein and herein called the "Net Revenues" ) . All the Bonds are equally secured by a pledge of, and charge and lien upon, the Net Revenues, and the Net Revenues constitute a trust fund for the security and payment of the interest on and principal of the Bonds. Additional sewer revenue bonds payable from the Net Revenues may be issued on a parity with the Bonds of this authorized issue, but only subject to the conditions and limitations contained in the Resolution. The principal of and interest on this Bond are payable solely from the Net Revenues, and the District is not obligated to pay it except from the Net Revenues. The general fund of the District is not liable, and the credit or taxing power of the District is not pledged, for the payment of the Bonds or their interest. The Bonds are not secured by a legal or equitable pledge of, or charge, 'lien or encumbrance upon, any of the property of the District or any of its income or receipts, except the Net Revenues. The District covenants that, so long as any of the Bonds are outstanding, it will fix, prescribe and collect rates, fees and charges in connection with the services and facilities furnished by said Enterprise so as to yield Net Revenues at least equal to the amounts thereof prescribed by the Resolution and sufficient to pay the principal of and interest on the Bonds in accordance with the provisions of the Resolution. The rights and obligations of the District and of the bearers and registered owners of the Bonds may be 18 modified or amended at any time in the manner, to the extent and upon the terms provided in the Resolution. *This Bond is given as evidence of a loan to the District made by the United States of America pursuant to the Consolidated Farm and Rural Development Act, and shall be subject to the present regulations of the Farmers Home Admin- istration and to its future regulations not inconsistent with the express provisions hereof. It is hereby certified that all of the conditions, things and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due time, form and manner as required by law and that the amount of this Bond, together with all other indebtedness of the District, does not exceed any limit prescribed by the Constitution or laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Resolution. IN WITNESS WHEREOF, the Atascadero County Sanitation District has caused this Bond to be executed under its official seal, signed by the President of its Board of •Directors and countersigned by the Secretary of its Board of Directors, and has caused this Bond to be dated June 1, 1982. President of the Board of Directors of Atascadero County Sanitation District [SEAL] Countersigned: Secretary of the Board of Directors of Atascadero County Sanitation District * This paragraph to be used only if the Bond is purchased by the Farmers Home Administration. 19 [FORM OF ENDOIISEMENT OF PAYMENT] ENDORSEMENT OF PAYMENT The United Statesf America, Farmers Home Administration, has duly pai for the purchase hereof, on dates and in amounts, as fol ows: Signature of the County Treasurer of Date of Payment Amount ofl,Payment San Luis Obispo County [FORM OF ASSIGNMENT OF INSTALLMENT BOND] For value received,i hereby assign and transfer unto the within bond, together with accrued interest thereon, here- by irrevocably constituting ind appointing atto�ney to transfer said bond on the books of the District at theloffice of the County Treasurer of San Luis Obispo County inlSan Luis Obispo, California, with full power of substitution in the premises. Dated: In theP resence of: 20 [FORM OF REGISTRATION ENDORSEMENT FOR INSTALLMENT BOND] Signature of the Date of Name and Address of County Treasurer of Registration Registered Owner San Luis Obispo County 21 (d) The Treasurer shall maintain registration books showing the dates of initial registration and the names and addresses of the owner of the coupon Bonds which are registered and of the installment Bond. Ownership of any of such Bonds may be transferred on such books by presentation of appropriate instruments of transfer by the registered owners or agents duly authorized in writing, together with such Bonds, whereupon the Treasurer shall record the names and addresses of the new registered owners on such books and on such Bonds. The principal of and interest on the coupon Bonds which are registered and on the installment Bond shall be payable solely to the registered owners thereof. (e) The President of the Board is hereby authorized and directed as such officer to sign each of the Bonds and the Secretary of the Board is hereby authorized and directed to countersign each of the Bonds and to impress or imprint by facsimile the official seal of the District thereon and to sign each of the interest coupons. The signature of said President may be a printed, lithographed or engraved fac- simile signature, but said Secretary shall manually countersign each Bond and shall sign each of the interest coupons by a printed, lithographed or engraved facsimile signature. In case any officer whose signature or countersignature appears on the Bonds or coupons shall cease to be such officer before the delivery of the Bonds to the purchaser, such signature or countersignature shall nevertheless be valid and sufficient for all purposes the same as though such officer had remained in office until the delivery of the Bonds. 22 Section 4. Application of Proceeds of Sale of Bonds. Upon the receipt of payment for any of the Bonds when the same shall have been duly sold by the District, the District shall set aside and deposit the proceeds received from such sole in the following respective funds and in the following order of priority: (a) The District shall deposit with the Treasurer in the Bond Service Account provided for in Section 6(e) hereof all accrued interest received upon the sale of any of the Bonds. (b) The District shall deposit the remainder of the proceeds received from the sale of any of the Bonds (including any premium) with the Treasurer in a fund which shall be known as the "Atascadero County Sanitation District 1982 Sewer System Improvement Fund" (herein called the "Improvement Fund" ) , which the District herein covenants and agrees to maintain with the Treasurer. All money in the Improvement Fund shall be withdrawn and applied exclusively for the purpose for which the Bonds were authorized to be issued. When such purpose has been accomplished, all money remaining in the Improvement Fund shall be transferred to the Revenue Fund provided for in Section 6(b) hereof. Section S. Security of Bonds. (a) The Bonds shall be revenue bonds, payable exclusively from the Net Revenues as in the Resolution provided, and are not secured by the taxing power of the District. No recourse shall be had for the payment of the Bonds, or interest thereon, or any part thereof, against the general fund of the District, nor shall the credit or taxing power of the District be deemed to be pledged thereto, and 23 the holders of the Bonds shall never have the right to compel the exercise of the taxing power by the District or the forfeiture of any property of the District. The principal of and interest on the Bonds shall not be a debt of the District nor a legal or equitable pledge, charge, lien or encumbrance upon any property of the District or upon any income, receipts or revenues of the District, except the Net Revenues pledged to the payment thereof as in the Resolution provided. (b) The Bonds hereby authorized to be issued and all additional sewer revenue bonds which may be issued in accordance with the terms and conditions hereof shall be special obligations of the District and shall be secured by a pledge of and shall be a charge upon and shall be payable, as to principal thereof, interest thereon and any premiums upon the redemption of any thereof, solely from and secured by a lien upon the Net Revenues as hereinafter provided. The District hereby pledges and assigns for the security of the Bonds all the Net Revenues, including the Net Revenues of all additions, betterments, extensions and improvements to the Enterprise which may hereafter be acquired or constructed. The sums required to meet the payment of principal of and interest on all the Bonds and any premiums upon the redemption of any thereof shall be secured by an exclusive pledge, charge and lien upon the Net Revenues, and all the Revenues, together with any interest earned thereon, and the funds hereinafter provided for in Section 6 hereof and any other funds that may hereafter be created ,from the Revenues for the payment of principal of or interest on or the better securing of the payment of principal of or interest on the Bonds, shall constitute a trust fund for the security and 24 payment of the principal of and interest on all of the Bonds and, except as otherwise specifically authorized by the Resolution, shall not be used for any other purpose so long as any of the Bonds or the interest thereon are outstanding or unpaid; except that out of such Net Revenues there may be ap•,)ortioned, so long as the principal of and interest on all of the Bonds are paid as the same become due and payable, together with all other charges required for the protection or better securing of the Bonds, such sums for such purposes as are authorized and provided for in Section 6(g) hereof. (c) The Bonds and all additional sewer revenue bonds which may be issued in accordance with the terms and conditions hereof shall be equally secured (except as to maturity) without priority for the number or date thereof or the time of sale, execution, or delivery thereof, by said pledge, charge and lien upon the Net Revenues pursuant to the Law and the Resolution. Said pledge, charge and lien shall be prior and paramount to any and all other claims and obligations that may arise or be incurred against the Net Revenues. Section 6. Revenues and Funds. For the purpose of making effective the lien of the Bonds provided for in Section 5 hereof, the District covenants and agrees with the holders of the Bonds as provided in this section. (a) Collection and Deposit of Revenues. All fees, tolls, rates and other charges in respect of the sewer service shall be collected by the District by bills of the District covering approximately monthly or bimonthly periods. Each bill shall become delinquent on a date not later than thirty (30) days following the date of payment 25 specified therein. If all or any part of any bill is not paid by the date of delinquency and within fifteen days thereafter, the District may discontinue all sewer service for which such bill was rendered. (k ) Revenue Fund. All Revenues shall be deposited when collected by the District with the Treasurer in a separate fund to be designated as the "Atascadero County Sanitation District Sewer System Revenue Fund" (which fund is hereby created and is herein called the "Revenue Fund") , which said fund the District hereby covenants and agrees to cause to be established and maintained by the Treasurer so long as any Bonds are outstanding hereunder. (c) Deposit of Money in Revenue Fund. All money in the Revenue Fund shall be transferred and deposited by the Treasurer in the following manner and order of priority in the following respective separate accounts, each of which the District hereby covenants and agrees to cause to be established and maintained by the Treasurer so long as any Bonds are outstanding hereunder, and all such money shall be held in trust by the District and the Treasurer in such accounts and shall be applied, used and withdrawn only for the purposes hereinafter authorized. (d) Maintenance and Operation Account. The Treasurer shall, on or before the 10th day of each calendar month, transfer from the money in the Revenue Fund and deposit to the credit of a separate account designated as the "Atascadero County Sanitation District Sewer System Maintenance and Operation Account" (which account is hereby created and is herein called the "Maintenance and Operation Account, " to be held by the Treasurer) , that amount of money 26 which is needed for the payment of the budgeted maintenance and operation costs of the Enterprise during such calendar month, and all money in the Maintenance and Operation Account shall be paid out by the Treasurer solely for such purpose. (e) Bond service Account. After making the monthly transfer required by Section 6(d) of the Resolution, the Treasurer shall, on or before the 10th day of each calendar month, transfer from the remaining money in the Revenue Fund and deposit to the credit of a separate account designated as the "Atascadero County Sanitation District Sewer Revenue Bond Service Account" (which account is hereby created and is herein called the "Bond Service Account, " to be held by the Treasurer) a pro rata monthly amount which, together with the money on deposit in said account and available for payment of interest on the Bonds due on June 1, 1983, will be sufficient to pay the interest on the Bonds becoming due on June 1, 1983, and thereafter, on or before the 10th day of each calendar month, beginning in June, 1983, a monthly amount equal to the sum of (a) one-sixth of the next succeeding interest payment on the Bonds, until such time as the next maturing installment of interest on the Bonds has been fully paid or duly provided for, and (b) one-twelfth of the next succeeding principal payment on the Bonds, until such time as the next maturing installment of principal of the Bonds has been fully paid or duly provided for. Money in the Bond Service Account shall be used and withdrawn by the Treasurer solely for the purpose of paying the principal of and interest on the Bonds as the same shall become due and payable. 27 (f) Bond Reserve Account. After making the monthly transfers required by Sections 6(d) and 6(e) of the Resolution, the Treasurer shall, on or before the 10th day of each calendar month, transfer from the remaining money in the Revenue Fund and deposit to tha credit of a separate account designated as the "Atascadero County Sanitation District Sewer Revenue Bond Reserve Account" (which account is hereby created and is herein called the "Bond Reserve Account, " to be held by the Treasurer) , an amount which is equivalent to 10% of the monthly deposits required for each corresponding month as provided in Section 6(e) of the Resolution, until such time as the funds and/or investments in the Bond Reserve Account shall aggregate a debt service reserve equal to the Maximum Annual Debt Service, and thereafter whenever the Bond Reserve Account is drawn upon the Treasurer shall likewise, on or before the 10th day of each calendar month, transfer from the remaining money in the Revenue Fund and deposit to the credit of the Bond Reserve Account an amount which is equivalent to 10% of the aforesaid monthly deposits, until such time as such debt service reserve equal to the Maximum Annual Debt Service shall have been restored; except that no payment need be made into the Bond Reserve Account when and if the amounts contained therein and in the Bond Service Account are at least equal to the principal of, together with interest then due or thereafter to become due, on all Bonds then outstanding. In the event that on the 10th day of the calendar month next preceding any principal or interest payment date there shall be insufficient money in the Bond Service Account to pay either the principal of or interest due on such date 28 on the Bonds, then the money in the Bond Reserve Account shall be used to make. such payment. All money in the Bond Reserve Account shall be used and withdrawn solely for such purpose or for the retirement of all of the Bonds then outstanding. (g) Surplus Account. After making the monthly transfers required by Sections 6(d) and 6(e) and 6(f) of the Resolution, the Treasurer shall, on or before the 10th day of each calendar month, transfer all remaining money in the Revenue Fund and deposit it to the credit of a separate account designated as the "Atascadero County Sanitation District Sewer System Surplus Revenue Account" (which account is hereby created and is herein called the "Surplus Account, " to be held by the Treasurer) . All money on deposit in the Surplus Account may be withdrawn and used by the District for any one or all of the following purposes: (i) To pay any reasonable and necessary maintenance and operation costs of the Enterprise for the current Fiscal Year for which no adequate budget amount was provided by the District; (ii) To purchase and cancel any of the outstanding Bonds; (iii) To meet debt service requirements on any indebtedness created to pay the costs of the acquisition or construction of additions, betterments, extensions or improvements to the Enterprise; (iv) To pay the cost of any unusual or extraordinary repairs or replacements of the Enterprise or to make any additions, betterments, extensions or improvements to the Enterprise which will either enhance 29 its revenue-producing capacity or provide a higher' degree of service; (v) To maintain the required debt service reserve equal to the Maximum Annual Debt Service by transferring to the Bond Reserve Account such amounts as may be necessary to eliminate any deficiency in st%ch account; or (vi) To make any other lawful expenditure of the District. The District shall not make any withdrawal of any money in the Surplus Account if and when the District is in default hereunder; and the Treasurer shall not permit any withdrawal to be made by the District of any money in the Surplus Account if and when, to the knowledge of the Treasurer, the District is in default hereunder. Section 7. Covenants of the District. In order that the payment of the Bonds and interest thereon shall be adequately secured, the District covenants and agrees with the holders of the Bonds: (a) The District will pay or cause to be paid punctually the principal of the Bonds, and the interest thereon, on the date or dates and at the place in accordance with the Resolution. (b) The District will operate the Enterprise in an efficient and economical manner and will keep and maintain the Enterprise in good repair and operating condition from the Revenues available for such purposes as provided herein, and will overate the business in connection therewith in an efficient manner and at a reasonable cost, and will prescribe, revise and collect such fees, tolls, rates and other charges in connection therewith so that the sewer 30 service is furnished to the inhabitants of the District and other users at the lowest possible cost consistent with sound economy and prudent management and the security and payment of the principal of and interest on the Bonds. (c) The District will fix fees, tolls, rates and other charges for the sewer service so as to yield Revem es at least sufficient with respect to the then immediately ensuing twelve months' period, after making due and reasonable allowances for contingencies and errors in the estimates, to pay each and all of the following charges in the respective priority and order below set forth, to wit: (i) All maintenance and operation costs of the Enterprise; (ii) All payments of principal of and interest on the Bonds as they become due and payable; (iii) All payments required for compliance in all respects with the terms of the Resolution, including particularly the provisions of Section 6 hereof; and (iv) All payments to meet any other obligations of the District which are charges, liens, or encumbrances upon, or payable from, the Revenues. (d) The District will preserve and protect the security of the Bonds and the rights of the holders thereof, and will warrant and defend such rights against all claims and demands of all persons. From and after the sale and delivery of any of the Bonds by the District, such Bonds and coupons appertaining thereto shall be incontestable by the District. (e) The District will pay and discharge, or cause to be paid or discharged, any and all lawful claims for 31 labor, materials and supplies which if unpaid might by law become a lien or charge upon the Net Revenues or any part of the Net Revenues prior to 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 protected. (f) The District will collect and hold in trust the Net Revenues or other funds pledged to the payment of the principal of and interest on the Bonds for the benefit of the holders of the Bonds and will pay the same over to the Treasurer as herein provided and will apply such Net Revenues or othe'r funds only as provided by the Resolution, or, if the Resolution shall hereafter be modified in the manner provided herein, only as provided in the Resolution as modified. (g) The District will keep accurate financial records and proper books relating to the Enterprise (separate from all other records and accounts of the District) in which complete and correct entries shall be made of all transactions relating to the Enterprise or any part thereof, and which, together with all other books and records of the District, shall at all times during business hours be subject to the inspection of the holders of the Bonds and their agents and representatives. (h) The District will, not later than 90 days after the end of each Fiscal Year, furnish to any holder of Bonds who shall request the same in writing copies of audit reports prepared by an independent public accountant reflecting in reasonable detail the financial condition and record of operation of the District and the Enterprise. 32 • i (i) The District will not mortgage or otherwise encumber, pledge or place any charge upon the Enterprise or any of the Net Revenues, and will not sell,- lease or other- wise dispose of the Enterprise or any part thereof necessary to its operation or use or necessary to the maintenance of the Net Revenues, or enter into any lease or agreement which impairs or impedes the operation of the Enterprise or any part thereof necessary to secure adequate Net Revenues for the payment of the principal of and interest on the Bonds, or which otherwise would impair the rights of the holders of the Bonds with respect to the Net Revenues or the operation of the Enterprise. (j ) The District will at all times maintain with responsible insurers for the benefit of the holders of the Bonds insurance on the Enterprise, which shall be adequate in amount and as to the risks insured against, including insurance against accident to or destruction of the Enterprise or any part thereof, against such risks as are usually insurable in connection with similar enterprises. In the event of any loss or damage the District shall repair or reconstruct the damage to any portion of the Enterprise and shall apply to payment of the cost of such repair or reconstrtiction the proceeds of insurance covering such loss or damage as herein provided. The District shall begin such work of repair or reconstruction promptly after such loss or damage shall occur and shall continue and properly complete the same as expeditiously as possible and shall pay or cause to be paid out of the proceeds of such insurance all costs and expenses in connection therewith so that the same shall be completed and the Enterprise shall be free and clear of 33 all liens and claims. If the proceeds received by reason of any such loss shall exceed the cost of such repair or reconstruction, the excess shall be deposited by the District in the Revenue Fund and shall be used and withdrawn only for the purposes specified in Section 6 hereof. The District will also carry for the benefit of the holders of the Bonds a fidelity bond with respect to each officer and employee of the District who receives, collects or has in his care or custody any of the proceeds of sale of the Bonds or any funds of the Enterprise, each such fidelity bond to be in an amount at least equal to the total money at any one time in the custody of such officer or employee. (k) The District will pay and discharge or cause to be paid and discharged all taxes and assessments and other governmental charges which may hereafter be lawfully imposed upon the Enterprise or upon any part thereof or upon any Revenues therefrom when the same shall become due; and the District will duly observe and conform to all valid requirements of any governmental authority relative to the Enterprise or any part thereof. (1) The District will have in effect at all times an ordinance of the District establishing rates, charges, rules and regulations relating to the sewer service, including provision for no free service, and requiring every person whose premises are connected to the Enterprise to pay the fees, tolls, rates and other charges applicable to the :nater service furnished to such premises. Said ordinance will provide that any person connecting to the Enterprise shall pay all costs of such connection. 34 (m) The District will not acquire, construct, operate or maintain, and will not within the scope of its powers permit any other public or private corporation, political subdivision, district or agency or any person whatsoever to acquire, construct, operate or maintain, within the District or any part thereof, any system or utility competitive with the Enterprise. (n) The District will not permit any part of the Enterprise, or any facility thereof, to be used or taken advantage of free of charge by any person, firm or corpo- ration, or by any public agency (including the State of California, the United States of America, or any public corporation, political subdivision, city, county, district, or agency of any thereof and the District or any agency of the District) . None of the foregoing covenants, agreements or duties shall be construed to require the expenditure in any manner or for any purpose by the District of any funds other than Revenues received or receivable from the Enterprise. Section 8. Additional Sewer Revenue Bonds. The District covenants and agrees with the holders of the Bonds that additional sewer revenue bonds having a lien upon and payable from the Net Revenues (including all Net Revenues from any additions, betterments, extensions or improvements to the Enterprise) may be issued upon a parity with the Bonds, but only as provided in this section and only for the purpose of acquiring or constructing additions, betterments, extensions or improvements to the Enterprise, or for the 35 purpose of refunding any of the Bonds, or for any combination of such purposes, and subject to the following conditions: (a) The District shall not at the time of the issue of such additional sewer revenue bonds be in default under the Resolution or under any Supplemental Resolution providing for the issuance of additional sewer revenue bonds; (b) The issuance of such additional sewer revenue bonds shall have been duly authorized pursuant to the Law; (c) The issuance of such additional sewer revenue bonds shall be provided for by a Supplemental Resolution duly adopted by the Board, the last maturity date of such additional sewer revenue bonds shall not be earlier than the last maturity date of the outstanding Bonds and such additional sewer revenue bonds shall mature on the anniversary date of the Bonds; (d) The Net Revenues of the Enterprise for the last recorded twelve consecutive calendar months next preceding the date of the adoption by the Board of the Supplemental Resolution authorizing the issuance of such additional sewer revenue bonds, as shown by a certificate of an independent public accountant, plus the estimated amount of the increase in Net Revenues for the first full twelve-month period in which the proposed additions, betterments, extensions or improvements to the Enterprise will be in operation, as shown by an opinion of an independent consulting engineer, are at least equal to 1.2 times the Maximum Annual Debt Service on all of the Bonds then outstanding and on such additional sewer revenue bonds proposed to be issued. 36 1 • In the event that any additional sewer revenue bonds are to be issued for the purpose of refunding and retiring only a portion of the Bonds then outstanding, then for the purpose of the calculation required under preceding par&graph (d) , the Maximum Annual Debt Service on the outstanding Bonds and on such additional sewer revenue bonds shall be determined as if said portion of the Bonds so to be refunded or retired is no longer outstanding; provided that nothing in the Resolution contained shall limit or restrict the issuance of any additional sewer revenue bonds if, at or before the issuance and delivery of such additional sewer revenue bonds, all Bonds theretofore issued will no longer be outstanding. Section 9. Further Assurances. The District will from time to time adopt such further resolutions and make, execute, deliver and record such further instruments and assurances as may now or hereafter be authorized by law or as may reasonably be required to comply with the terms and provisions of the Resolution in order to assure to the holders of the Bonds the rights and benefits herein provided for them. Section 10. Eminent Domain Proceedings. If all or any part of the Enterprise shall be taken by eminent domain proceedings or other proceedings authorized by law, the net proceeds realized by the District therefrom shall be deposited by the District in a special fund with the Treasures:, i 7 trust for the Exclusive benefit of the holders 37 of all Bonds then outstanding, subject to the following conditions: (a) If such funds are sufficient to provide for the payment of the entire amount of principal due and to become due u,)on all Bonds then outstanding (either at maturity or upon the earliest call for redemption) , together with interest thereon, then such funds shall be applied by the District to the payment of the principal of and interest on the Bonds as the same become due (either at maturity or upon the earliest call for redemption) . (b) If such funds are insufficient to provide for the purpose in subparagraph (a) of this section, then such funds shall be applied by the District pro rata first to the payment of the principal of the Bonds and then to the payment of the interest thereon, and the holders of all outstanding Bonds shall be entitled to share in such funds equally and ratably in the proportion which the principal amount of the Bonds owned by each holder bears to the total principal amount of all the Bonds then outstanding, without preference or priority of any one Bond over any other Bond, and irrespective of any registration of such Bond for nonpayment or otherwise as provided by law, so that all of the Bonds shall be deemed under such circumstances to be on a parity and entitled to share in such proceeds on the basis of absolute equality. No such pro rata sharing shall impair the right of the holder of any Bond, which is absolute, to receive payment in full of the principal of and interest on all of the Bonds held by him from any source of payment or from any funds which may then or thereafter be available for such payment by the District. 38 Notwithstanding anything herein contained, if such eminent domain proceedings do not substantially impair or affect the operation of the Enterprise or the ability of the District to meet all of its obligations hereunder with respect to the payment of the principal of and interest on the Bonds, then the Bcard may by resolution so determine and declare (which determination shall be final and conclusive) , whereupon such net proceeds realized by the District shall be considered to be and treated as Revenues hereunder. Section 11. Default; Remedies of Bondholders. (a) If one or more of the following events (herein called "events of default" ) shall happen, to wit: (i) If default shall be made in the due and punctual payment of the principal of any of the Bonds when and as the same shall become due and payable, and such default shall have continued for a period of thirty (30) days; (ii) If default shall be made in the due and punctual payment of any interest on any Bond when and as such interest shall become due and payable, and such default shall have continued for a period of thirty (30) days; (iii) If default shall be made by the District in the observance of any of the covenants, agreements or conditions on its part in the Resolution or in the Bonds contained, and such default shall have continued for a period of thirty (30) days; or (iv) If the District shall file a petition or answer seeking reorganization or arrangement under the Federal Bankruptcy Laws or any other applicable law or 39 statute of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the District, seeking reorganization under the Federal Bankruptcy Laws or any other applicable laa or statute of the United States of America, or if vzider 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 District or of the whole or any substantial part of its property; then and in each and every such case the holders of twenty- five per cent (25%) of all of the Bonds then outstanding shall be entitled, upon notice in writing to the District, to declare the entire principal of the Bonds and the interest accrued thereon to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in the Resolution or in the Bonds contained to the contrary notwithstanding. All of the Revenues of the Enterprise, including all sums in all of the funds and accounts provided for in Section 6 hereof upon the date of the happening of any event of default, and all sums thereafter received by the District hereunder shall be applied by the District and the Treasurer in the order following: First, to the payment of the costs and expenses of the holders of the Bonds in declaring such event of default, including reasonable compensation to their agents, attorneys and counsel; and Second, to the payment of the whole amount then owing and unpaid upon the Bonds for principal and interest, 40 J � . and in case such money 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, ratably to the aggregate of such principal and interest. (b) Any holder of Bonds shall have the right, for the equal benefit and protection of all holders of Bonds similarly situated: (i) By mandamus or other suit or proceeding at law or in equity to enforce his rights against the District, the Board, and any officers, agents and employees of the District, and to require and compel the District, the Board, or any such officers, agents or employees, to perform and carry out their duties under the Law and their agreements with the holders of the Bonds as pro- vided in the Resolution; (ii) By suit in equity to require the District and the Board to account as if they were the trustee of an express trust; or (iii) By suit in equity to enjoin any acts or things which may be unlawful or violate the rights of the holders of the Bonds. Except only as provided in Section 12 hereof, nothing in the Resolution or in the Bonds contained shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective holders of the Bonds at the respective dates of maturity, as herein provided and out of the Net Revenues herein pledged for such payment, or 41 40 affect or impair the right of action of such holders, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied in the Bonds. The remedies conferred hereby and by the Law upon the holders of the Bonds do not exclude any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred hereby or by the Law or by any other law. A waiver of any default or breach of duty or contract by any holder of Bonds shall not extend to or affect any subsequent default or breach of duty or contract or impair any rights or remedies on any subsequent default or breach. The delay or omission of any holder of Bonds to exercise any right or power accruing upon any default shall not impair any such right or power and shall not be a waiver of any such default or acquiescence therein. Every substan- tive right and every remedy conferred upon any holder of Bonds may be enforced and exercised as often as is deemed expedient. If any suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned or determined adversely to any holder of Bonds, then, and in every such case, the District and such holder shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. Section 12. Amendment of Bonds and Resolution. All of the provisions of the Resolution shall constitute a contract between the District and the holders of the Bonds hereby authorized, and from and after the sale and delivery of any of the Bonds no amendment, alteration or modification 42 of the Bonds or the coupons appertaining thereto or of the Resolution shall be made which shall in any manner impair, impede or lessen the rights of the holders of the Bonds or the coupons appertaining thereto then outstanding, except by a Supplemental Resolution approved by the prior written consent of the holders of seventy-five per cent (75%) of tall of the Bonds then outstanding; except that no such amendment shall affect the interest rate or maturity date of any Bonds without the consent of the holders thereof. Section 13 . Discharge of Resolution. Whenever the Bonds and all interest then accrued thereon shall have been fully paid and discharged, or provision adequate therefor shall have been made, the agreements in the Resolution contained shall cease and determine and the District shall be under no further obligation to apply the Revenues of the Enterprise as herein required, or otherwise to do or perform any of the covenants, conditions or agreements in the Resolution contained. s Section 14. Partial Invalidity. If any section, paragraph, subdivision, sentence, clause or phrase of the Resolution shall for any reason be adjudged by any court of competent jurisdiction to be unconstitutional, unenforceable or invalid, such judgment shall not affect the validity of the remaining portions of the Resolution. The Board hereby declares that it would have adopted the Resolution and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases of the Resolution or the 43 6 • i application thereof to any person or circumstance, may be held to be unconstitutional, unenforceable or invalid. Section 15. Effective Date of Resolution. The Resolution shall be forthwith entered upon the minutes of the Board and shall take effect immediately upon adoption. PASSED AND ADOPTED by the Board of Directors of the Atascadero County Sanitation District this 26th day of April, 1982, by the following vote: AYES: Directors Highland, Mackey, Nelson, Stover and Wilkins NOES: None ABSENT: None Pr4sident of the/ Board of 'Dire tors of Atascadero Cou ty Sanitation District [SEAL] Attest: SecraryVo f t e Board of Directors of Ata cade County Sanitation District 44 t SECRETARY'S CERTIFICATE y I, Murray L. Warden Secretary of the Board of Directors of Atascadero County Sanitation District, San -Luis Obispo County, California, hereby certify as follows: The foregoing is a full, true and correct copy of a resolution duly adopted at a regular meeting of said Board of Directors duly and regularly and legally held at the regular meeting place thereof on April 26, 1982, of which meeting all ter} q i f r a r _ of the members of said Board of Directors had due notice and at which a majority thereof was present. At said meeting said resolution was adopted by the following vote: AYES: Directors highland, Mackey, nelson, Stover and Wilkins NOES: None ABSENT: None y I have carefully compared the same with the origi- nal minutes of said meeting on file and of record in said s a�. District, and the foregoing is a full, true and correct copy x of the original resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified or Fx� Wiwi rescinded since the date of its adoption, and the same is now in full force and effect. F Dated: April 27, 1982. X Vis, Se etarof the Board of irectors "_ $f of A asca ero County Sanitation District h x:y 45 v: t