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HomeMy WebLinkAboutRES 1968-22 - Board RESOLUTION NO.6822 PROVIDING FOR THE ISSUANCE OF $115,000 PRINCIPAL AMOUNT OF BONDS OF TRUCKEE PUBLIC UTILITY DISTRICT; PRESCRIBING THE DATE AND FORM OF SAID BONDS; PRESCRIBING THE INTEREST MATE AND THE MATURITIES THEREOF AND THE SALE THEREOF TO UNITED STATES OF AMERICA* AUTHORIZING THE EXECUTION OF SAID BONDS; PROVIDING FOR THE LEVY OF TAXES FOR THE PAYMENT THEREOF; AND PROVIDING FOR THE PLEDGING OF REVENUES TO SECURE SUCH PAYMENT, WHEREAS, Truckee Public Utility District (hereinafter called the "District") is authorized, pursuant to the Public Utility District Act (hereinafter called the "District Act") of California (Division 7, Section 15501 et seq. of the Public Utilities Code of the State of California), to issue general obligation bonds to pay the cost of acquiring, constructing or completing the whole or any portion of any utility or works referred to in the District Act, or for acquiring any works,, lands, structures, rights or other property necessary or convenient to carry out the objects, purposes or powers of the District; and WHEREAS, the District owns and operates a public utility system (said public utility system and all improvements, enlargements, extensions, betterments or additions thereto, whenever, and however made, being hereinafter called the "System"), consisting of electric transmission, distribution and service lines and facilities; and WHEREAS, the District is authorized, pursuant to Section 16578 of the District Act, to accept loans from the United States of America (hereinafter called the "Government") without limitation by any other provisions of the District Act requiring approval of indebtedness for the purpose of financing the construction, maintenance and operation of any enterprise in which the District is authorized to engage, and the Board of Directors (hereinafter called the "Board of Directors") of the District is authorised to issue bonds to the Government evidencing loans made by the Government to the District, and to do all things necessary in order to avail the District of such loans; and WHEREAS, the District, pursuant to the authority vested in it by Section 16578 of the District Act, has heretofore entered into a certain loan contract (hereinafter called the "Original REA Loan Contract"), dated as of October 28, 1963, with the Govern:,,-ent, acting through the Administrator of the Rural Electrification Administration (hereinafter called the "Administrator"), providing for a loan in an amount not in excess of $367,000 by the Government to the District to finance the construction by the District of certain improvements, enlargements, extensions, additions and betterments of and to the Systems which improvements, enlargements, extens ions, additions and betterments (hereinafter called the "First REA Project") consist of electric transmission distribution and service lines and all substations and transformers, meters and other equipment necessary for the efficient operation thereof* and WHEREAS, the loan provided for in the Original REA Loan Contract is evidenced by a series of the District's general obligation bonds (hereinafter called the 'First 2% Series Bonds"), which were issued sold and delivered b the District to the Government pursuant to Resolution No. 64-16 (hereinafter called the "First REA Bond Resolution") duly adopted by the Board of Directors on August 25, 1964; and WHEREAS, the District in and by the First REA Bond Resolution, has pledged the net revenues of the System as added security payment for the a sent of the First 2% Series Bonds (the System being a revenue producing facility within the meaning of Section 53500 (d) of the Government Code of the State of California •which authorizes such a pledge); and WHEREAS, certain provisions of the Original REA Loan Contract and the First REA Bond Resolution prohibit the District from constructing or acquiring additions of or extensions to the System or pledging, assigning, mortgaging or otherwise encumbering any properties included in the System or the revenues thereof or any other of its properties without the prior approval of the Government* and WHEREAS, upon application made by the District to the Government, the District with the consent of the Government, has entered into a certain agreement thereinafter called the "Acquisition Agreement") dated as of larch 1 1967 as amended, with Sierra Pacific Power Company thereinafter called "Sierra Pacific") providing for the sale by Sierra Pacific to the District of certain electric facilities thereinafter called the "Donner Lake System"), and the making .. Y ), i g of in stallment payments by the District to Sierra Pacific in payment of the purchase price thereof; WHEREAS, the Acquisition Agreement provides that said installment payments to be made by the District are special obligations of the District and are secured by a pledge of and lien on the moneys derived from the operation of the Donner Lake System and payable solely from the net revenues thereof• and WHEREAS, the Government consented to the District's entering into the Acquisition Agreement upon the express condition that as soon as all the indebtedness of the District to Sierra Pacific for the purchase price of the Donner Lake System was paid, the District would, to the satisfaction of the Government, subject the properties included in the Donner Lake System and all revenues arising therefrom to the first lien and Y pledge created b the First REA Bond Resolution as added security for the payment of the First 2% Series Bonds* and WHEREAS, the Board of Directors has determined and does duly further determine that its electric facilities shall be further improved and enlarged in order to furnish electric service to additional consumers in rural areas not receiving central station service (the facilities required to furnish service to such additional consumers, some of whom are located in the Donner Lake System area and others of whom are located in the System area, being hereinafter col- lectively called the "Second REA Project") * and WHEREAS, the Board of Directors on behalf of the District has applied to the Government for an additional loan in an amount not in excess of $115,000 to finance the construction of the Second REA Project and has heretofore approved and authorised the execution of a certain agreement thereinafter called the "Amendment") between the District and the Government, which amends the Original Y REA Loan Contract in certain respects, including an increase in the amount of the loan provided for therein b said amount P y ono t of $115,000 (the Original REA Loan Contract, as amended by the Amendment, being hereinafter called the "Loan Contract")* and WHEREAS, the Amendment has been executed by and on behalf of the parties thereto; and WHEREAS, the Loan Contract, as so amended, provides the terms and con-- d i tions for the sale by the District and the purchase by the Government of an additional series of the District's general obligation bonds (hereinafter called the "Second 2% Series Bonds") in an aggregate principal amount not in excess of $115,000 to finance the construction of the Second REA Project; and WHEREAS, it is intended hereby to provide for the issuance, sale and delivery of the Second 2% Series Bonds as general obligation bonds of the .Dis- trict; and WHEREAS, it is further Intended that the pledge of the net revenues of the System created by the First REA Bond Resolution as added security F Y-for the a ment of the First 2% Series Bonds shall be modified by this Resolution to the end that when the District has paid in full the purchase price of the Donner Lake System all revenues of such system shall be pledged and encumbered by pledge the led e created by this Resolution and that until such payment has been made the term "System", as hereinafter used in this Resolution, shall not be deemed to include the Donner Lake System; and WHEREAS, it is also intended that the Second 2% Series Bonds issued pursuant to this Resolution shall be secured equally and ratably with the First 2% Series Bonds by a first lien on and pledge of the net revenues of the System, as provided in the preceding paragraph; ♦ i NOW, THEREFORE, BE IT RESOLVED by the Board of Directors as follows: SECTION 1. Bonds (hereinafter called the "Second 2% Series Bonds") of the District in the aggregate principal amount of $115,000 to be known as "Truckee Public Utility District Electric Bands, Second 2% Series" shall be issued by the District to pay the cost of the construction of the Second REA Project. SECTION 2. The Second 2% Series Bonds shall be issued to the Govern- ment in accordance with law, with the provisions of this resolution and pursuant to the Loan Contract (as amended by the Amendment). The Second 2% Series Bonds shall be negotiable in form, of the character known as serial and shall be n ered from 1 to 32, both inclusive. Said Bonds n ered 1 to 18, both in- clusive, shall be in the denomination of $3,000 each; •said Bonds numbered 19 to 28, both inclusive, shall be in the denomination of $4,000 each said Bonds numbered 29 to 31 both in � inclusive, shall be in the denominations of $5,000 each, and said Bond numbered 32 shall be in the denomination of $6,000. All of said Bonds shall bear interest at the rate of two per centum (2%) per annum from their date until paid, payable semi-annually on the first day of May and November in each year with the first installment of interest payable on November 1 y , 1968. The principal and interest on said Bonds shall be payable in lawful money of the United States of America at the United States Treasury, 8 Washin ton'. D. C. The Bonds shall be dated May 1, 1968 and shall bear serial numbers and shall mature as follows: Bond Numbers Amountaturit X_ 1-18 $3,000 annually 5,w lm 71 w 5-1-88 19-28 4,000 annually 5 l � y mm8 9 a 5•1m 98 29-31 5,000 annually 5-14 99 = 5ft 1.01 32 6,000 annually 5-1..02 The Second 2% Series Bonds shall be registered as to principal and interest in the name of the united States of America. SECTION 3. The Second 2% Series Bonds shall be substantial) in the following S form, the blanks in said form to be filled in.with appropriate words or figures, P S , to wit: 1 40 Mow -_-__.1 i rt4'naiF�lYgfifori�l UNITED STATES OF AMERICA . STATE OF CALIFORNIA TRUCKEE PUBLIC UTILITY DISTRICT ELECTRIC BONDS SECOND 2% SERIES No. For value received, the Truckee Public Utility District, a public utility y district organised and existing under the Constitution and laws of the State of California, hereby acknowledges itself indebted and promises to Y a to the bearer pay thousand dollars ($, ) on the first day of 9 .9 (unless this bond be sooner ceded as hereinafter provided) , with interest thereon F � , arson from the date hereof at the rate of two per centum (2%) per ann payable able semim P annually on the first day of May and the first day of November of each year, be- ginning .lovember 1, 1968; Y This bond is issued under and in strict compliance with the Constitution P o stitution and laws of the State of California and under and pursuant to proceedings of said District duly adopted and taken, This bond is subject to redemption, at the option of s P , p said District, prior to the maturity date hereof, on any interest payment date, par plus lus accrued inw serest to the date of redemption. Notice of the redemption hereof shall be given by said District by sending to the registered owner hereof 30 days notice in writing by registered mail. After the date fixed for such redemption,ion� interest on P this bond thereafter shall cease. It is hereby certified, recited and declared that all acts, conditions and things required by law to exist, happen and to be performed precedent to and. In the issuance of this bond have existed, happened and 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 said District, does not exceed any prescribed rescri.bed b � Y the Constitution or laws of the State of California. The full faith and credit of said District are hereby pledged for the punctual payment of the principal of and interest on this bond. IN WITNESS WHEREOF, said Truckee Public Utility District has caused this bond to be executed in its name and on Its behalf, under its seal, S Y signed b the President of its Board of Directors and by its Treasurer, and countersigned b � $ Y its Clerk, and this bond to be dated the lot day of May, 1968, TRUCKEE PUBLIC UTILITY DISTRICT by President of its Board of Directors Countereigned: Clerk of Truckee Public Utility District r�rrsrrir.w REGISTRATION STATEMENT May 1, 1968 This bond is registered pursuant to the statute in such case s made and provided in the nam of the UNITED STATES OF AMERICA and the interest erest and princi pal thereof are hereafter payable to such owner. Treasurer of Truckee Public Utility District SECTION 4. The Clerk of the District is directed to cause the Second 2% Series Bonds to be lithographed, to cause the blank spaces thereof ereof to be filled in to comply with the provisions hereof, to procure their execution b the e proper officers, and to deliver them to the Administrator of the Rural Electrification Administration of the United States of America. SECTION 5. The Second 2% Series Bonds shall be sold b the Board y of Directors at the par value thereof subject to the credit for accrued interest, all in accordance with the provisions of the Loan Contract. All credit memoranda received upon the issuance of such Bonds from the Government shall be held ld by the District until the next interest payment date on such Bonds with respect to which such credit memoranda may have been issued, and on such next interest payment date following the receipt of such credit memoranda such credit memoranda shall be delivered to the Government in payment of the interest represented p ted thereby. SECTION 6. The President of the Board of Directors is hereby t or au h o- ised and directed, as such officer, to sign each of the Second 2% Series 'authorized Bonds on behalf of the District, and- �:he Clerk of the District is hereby a thorised and directed to countersign each of such Bonds and affix the seal of the Di s trict thereto. Such signing, counter-signing countermsigning and sealing shall be a sufficient and binding execution of the Second 2% Series Bonds b the District*(strict. In case any of such officers whose signatures or countersignatures appearing ppearing on such Bonds or coupons shall cease P to be such officer before the delivery of such Bonds to the Government, such signatures or countersignature shall 11 nevertheless be valid and sufficient for all purposes the same as if the had y remained in office until the delivery of the Second 2% Series Bonds, SECTION 7. Until definitive Second 2% Series Bonds are read y for delivery, the District may execute and deliver in lieu thereo f one or more typeft written, printed, or lithographed interim certificates substantia lly in the of said Bonds as set forth in Section 3 above with such inser tional variations, and omissions as may be appropriate and with the , following • g language added: This certificate is issued solely' for the convenience of the District pending preparation and execution of the definitive Bond hereby sen'-ed and acceptance of this certificate in lieu of said Bond shall not in any way prejudice the rights and privileges of the holder hereof, ereof, or in any way limit or impair the obligations of the District but all such rights, privileges and 'Obligations shall be determined as if a properly executed and otherwise valid definitive Bond had been delivered in place hereof, SECTION 8. In case any of the Second 2% Series Bonds shall .� become mutt lated or be destroyed or lost, the District shall cause to be executed and deft 1 ivered a new Bond ,of like date and tenor in exchange and substitution titution for, and upon cancellation of, the mutilated Bond ,--or Art lieu of and substitution .for the Bond so destroyed or lost, and if any such Bond so mutilated, destroyed or lost shall have matured, the District may a the Y pay same in lieu of delivering a new Bond in substitu 7 tion therefor. The applicant for Ply such substituted Bond or pnyft k ment shall furnish evidence satisfactoryto the District ict of the destruction or loss of any destroyed or lost Bond and shall also furnish indemnity satisfactory to the District and comply with the requirements of the _ � District in connection therewith. _4 SECTION 9. Any of the Second 2% Series Bonds at the time outstanding b subject d S shall e u ject to redemption at the option',of the District, as a whole or in part, , 4 n inverse numerical order, on any interest payment date at the principal� P p l a unt thereof plus accrued interest thereon to the date of reds Lion. Notice m mP o f the re dempt ion of any of the Bonds shall be given b the District b notice n Y y i writing sent to the registered owner not less than 30 days prior to the date fixed for such redemp,. _ Lion. The Clerk of the District s. hall at all times maintain a record showing the names and addresses of the holders of the Second 2% Series Bonds and of the serial numbers of said Bonds held by each such holder. After the date fixed for such redemption of any of said Bonds, interest on such of the Bonds shall cease. SECTION 10. All Second 2% Series Bonds issued pursuant to this Resolution P which shall be returned or surrendered to the District by reason of the payment or redemption the rel..r, or for exchange or for an other shall Y Beason, all be forthwith can- celled and cremated and a certificate in respect of such cancellation P ca ellation and cremation executed by the Clerk of the District shall be affixed to the appropriate t the District. records of SECTION 11. In order to secure equally and ratably the payment of the prfnm cipal of and interest on the First 2% Series Bonds and the Second co d Z% Series Bonds (the First 2% Series Bonds and the Second 2% Series Bonds being h . g hereinafter collectively called the "Bonds"), according to their tenor and effect without it out preference, priority, or distinction as to the lien, or otherwise of an of the Y said Bonds over any other of said Bonds by reason of the priorityin time of the execution,ecution, delivery, or maturity thereof, or the assignment or negotiation thereof,, or otherwise, and further to secure the due performance of the covenants agreements and : S provisions in this Res- olution contained, and for the uses and and upon purposes the terms, conditions, and provisos herein expressed and declared ' the District does her eby reby irrevocably pledge, assign and set over unto the Government, and its assigns, a 8 : 11 revenues to the extent herein provided derived by the District from the sale 1 of electric energy, or other service rendered or furnished by the. District b through y or the System, after deduct- ing therefrom the actual cost of the operation and maintena nce ante of the properties of the District from which such revenues" shall be derived provided, however, that there shall not at any time be included in such cost of operation and maintenance any amount to pay or make provisions for the payment of the of principal or interest on any in- debtedness of the District maturing more than one (1) year after the date of the incur- rence thereof, or any allowance for depreciation or obsolescence P le cence (the revenues speci- fied in this paragraph as being pledged hereby being "Revenues"), 8 Y g hereinafter called the and a first prior and paramount lien on the Revenues for such ur os P P e is hereby created ` an SECTION 12. That at r y time or times when the amount of the District's general funds derived from the revenues of the System exceeds y twenty percent of i i s total plant, the District shall make of or payments on account of the principal of any one or more of the Bonds in inverse order of maturityt Provided, however, that payaentsre required to be wade pursuant to this section do not reduce the District's istrict s general funds below fifteen percent of its total plant.. As use . rr rr P d in this section* (1) the term general funds means the sum of the following accounts • " rr r� 8 t of the District. Nonutility Property less Accumulated Provision for Depreciation r, t� and Anarort isAt ion of Donut it i t Property," Other investments in Associated Y Organisat ions$" "Other Investments." "Restricted Funds," "Cash •• General," "Workin " rr ' rr �r � g Funds" and Temporary Cash Investments*" '� and (2) total plant means the sum of the ' following accounts of the District: "Elec-� trio Plant in Service," "Electric Plant Purchased or " 't „ '� Sold, Electric Plant Leased to Others, Electric Plant Held for Future� Use " " rr , Completed Construction not Classified Construction Construction Work in Progress,'" "Electric Plant Ac ' quisftion Adjustments" and "Other Utility Plant*" Titles of accounts used in the foregoing definitions shall have the meanings set forth in the prevailing Y accounts system of o nts prescribed f©r its electric borrowers by the Rural Electrification Administr ation. SECTION 13. The District shall during i g each calendar month commencin with August, 1968, pay over and deposit it h 8 P the Revenues for the preceding month u to 1 800 a month untilP � � February, 1970, and up to a month than thereafter. .plus the amounts of y deficiencies in said amrounts in previous n p months due to inadequacies of revenues in one or more banks ' (each of which is herein sometimes refs "Depositary") referred to as a Depositary ) which shall have been approved b the holder Y or holders of not less than a majorityin principal aaaount of the bonds at the time outstanding (hereinafter collectively called the "Majority Bondholders" in a special Y P cial sinking fund or funds n Depositaries8 i the Depositary or (such special sinking fund or funds being sing hereinafter collectively called the Special Revenue Fund") to be held for the benefit of all of those who shall from time to time hold any of the Bonds(hereinafter s " sometimes collectively called the Bond- holders") upon and dub ect to the terms and d conditions in this Resolution until there shall have contained! been accumulated in the Special Revenue Fund an amount of money (hereinafter called "Current Requirements") sufficient for the (1) .th a por. tion of the payment of principal of and interest on the Bonds which shall have becuame due but which shall be unpaid, if any, and (2) the onion p of the principal of and interest Brest on the Bonds which shall be come due during the next two months. The District shall i�t�to the Special Revenue also pay Fund all of the remaining Revenues have been accumulated 8 � if �Y, until there shall r� in the Special Revenue Fund an called Reserve Requirements") which � amount of money (hereinafter shall be sufficient for the payment of the action of the principal of, and the interest on the notes which shallP become due during the -5- T_. F✓+`.e'i:i"7V.4 _.... ,. 1 'W'Y2 next succeeding calendar year. Any Revenues remaining after the Current Require- ments and Reserve Requirements shall have been met may be used by the District in the general conduct of its business; provided, however, that if the amount in the Special Revenue Funds, having reached the maximum hereinbefore prescribed, shall at any time thereafter fall below a sum equal to the total of the Current Require =cents and the Reserve Requirements, the District shall be obligated to resume making said payments of the Revenues in the monthly amounts provided in this section into the Special Revenue Fund until the maximum amount hereinbef ore specified shall have again been accumulated therein, it being the intention hereof that before any of the Revenues may be employed by the District in the general conduct of its business the total amount in the Special Revenue Fund shall at all times, so long as any of the Bonds shall be outstanding, be maintained in an amount equal to the total of the Current Requirements and the Reserve Requirements. SECTION 14. Any portion of the Special Revenue Fund maintained in any Depositary shall be secured continuously by (a) the pledge to the District by such Depositary of bonds of the Government having an aggregate market value of least equal to the amount on deposit in the particular Special Revenue Fund (all bonds of the Government pledged as such security to be either deposited with the District or held by a trustee or agent satisfactory to the District and the Majority orit Bond- holders), (b) deposit insurance maintained by the Depositarywith the Federal Deposit p Insurance Corporation, or other similar agency of the Government, in an amount equal to the amount on deposit in the particular Special Revenue Fund, or that part thereof not secured as herein otherwise provided, or (c) a surety bond or bonds payable to the District and the Bondholders, which shall be in form, sufficiency and substance satisfactory to the District and the Majority Bondholders. The Bonds of the Govern- ment deposited, or the deposit insurance maintained, or the surety bond or bonds delivered pursuant to this Section 14 to secure each such portion of the Special Rev» enue Fund, shall be deemed to be deposited, maintained or delivered, as the case may be, for the benefit and security of the Bondholders, and in case there shall be any default by any Depositary with respect to any such Special Revenue Fund such bonds of the Government, insurance, or the surety bond or bonds shall inure to the benefit of the Bondholders and the terms and conditions of this Resolution shall apply 1 thereto with the same force and of feet as they apply to the moneys in any such Special Revenue Fund. SECTION 15. The District shall apply the money in the Special Revenue Fund for the payment of the principal of and interest on the Bonds in order in which the same shall become due only and for no other purpose, provided however (a) that the District on any payment date specified in the Bonds may use all or any part of the money remaining in the Special Fund in excess of the total of the Current Require- ments and the Reserve Requirements for the payment of all or any part of the P rin- cipal of the Bonds then remaining unpaid and any such payments shall be applied on account of the payment of the principal of the Bonds last becoming due, and (b) that any money remaining in the Special Revenue Fund in excess of the Current Re- quirement s may be invested as provided An in Section 14 hereof. SECTION 16. The Board of Directors may invest in bonds of the Govern- ment any moneys in the Special Revenue Fund in excess of the Current Req uiremants. All bonds in which funds in the Special Revenue Fund shall have been invested shall be held by the District, together with the interest received therefrom, as part of the Special Revenue Fund. If any of the moneys in the Special Revenue Fund shall Y P 11 be invested in such bonds, the Board of Directors shall on or before the several dates for the payment of the principal, of and interest on the Bonds sell such of the bonds as shall be required to be sold to provide , �moneys which together with the moneys, if any, in the Special Revenue Fund,. shall be sufficient for the a P Y went s of the principal of and interest on the Bonds which shall become due and Y a - P able on the next following interest and principal payment date, and the proceeds .o%f such sales of such bonds shall be paid .into the Special Revenue Fund, In add - f .-lion to the sale of any such bonds to pay the principal of or interest on the e Bond s, the Board of Directors may at any time sell all or an of such bonds so held in Y the Special Revenue Fund and the proceeds of such sale of such bonds shall be aid n p into the Special Revenue Fund and may be either reinvested in bonds of the Government� t or held in cash in the Special Revenue Fund. SECTION 17. In the event that the moneys' in the Special Revenue Fund Y Pe shall, at any time, be less than the total of the Current Requirements and the Reserve Rego quirements for the payment of all or any part of the principal of the Bonds then P re maining unpaid, the Board of Directors shall, at the time of fixing the general tax levy, and in the manner for such general tax levy provided, levy and collect annually 6- each yes r until the Bands are paid or until, the moneys in the Special Revenue Fund or Special Revenue Funds shall be in excess of Current Requirements and Rem serve Requirements, a tax sufficient to increase the Special Revenue Fund to such amount. The taxes herein required to be levied and collected dhall be in addi- tion to all other takes levied for District purposes and shall be collected at the time and in the same manner as other District takes are collected and shall be used for no purpose other than for the payment of interest and principal on the Bonds. SECTION 18. The District shall cause to be prepared and shall adopt and promulgate a schedule of rates and charges for electric energy to be furnished by the System to its consi maers calculated to. provide funds sufficient to meet the requirements as specified in this Resolution, and to provide for all expenses of operation and maintenance of the System, including reasonable reserves therefor and said rates shall, whenever necessary, be revised by the District to meet said requirements. SECTION 19. Except to secure the Bonds and loans wade by the Goverment to the District, the District shah, not, without the consent of the Majority y Bondf- holders, hereafter charge, assign, pledge, mortgage or otherwise enc er any of its property, real or personal, tangible or intangible, wherever situate, or the rev- enues arising therefrom. SECTION 20. The District shall duly and punctually pay the principal of and interest on the Bonds at the dates and places and in the manner provided th P ere in according to the true intent and meaning thereof, and also all other am be maw � co ing due hereunder. SECTION 21. The District shall at all times, so long as an of the Bands Y shall be outstanding, take or cause to be taken all such action as from time to time may be necessary to preserve its corporate existence and to reserve and renew P all franchises, rights of way, easements, permits and licenses now or hereafte r er to it granted or upon it conferred, and shall comply with all valid laws,' ordinances: ream gulations, and requirements applicable to it or its The District shall property, 11 not, without the approval in writing of the Majority Bondholders take or Buffer r to be taken any steps for reorganisation or to consolidate with or mere in n g to any other corporation, or to sell, lease, or transfer (or make any agreement therefor) an of y its properties, or any part thereof. SECTION 22. The District shall at all times maintain i in and preserve its properties and each and every part and parcel thereof in good P S repair, working order and condition, and shall from time to time make all needful and proper ro P P repairs, renewals, and replacements and useful and proper alterations additions be.., : , �t bi"uent s, and improvements, and shall, subject to contingencies beyond its reasonable E Fcontrol, at all times keep its plants and properties in continuous operation and use se all reasonable diligence to furnish the consumers served b it with an adequate u � � supply of electric energy and other services furnished by the District • SECTION 23. Except as specifically authorized in writs in advance �►g by the Majority Bondholders, the District shall purchase all materials,, equipment, and rem placements to be incorporated in or used in connection with an .. y of its properties out right, and not subject to any conditional sales agree ment chat � tel mortgage, bailment lease, or other agreement reserving to the seller an right,Y 8 , title, or lien. SECTION 24. The District shall take out, as the respective risks are inm curred, and maintain insurance of such classes and in such amounts and a from time to time bake such changes in respect thereof, as the Majority grit j F Bondholders shall have de. termined to be advisable to safeguard the interests of the Bondholders The District shall, upon request of the Majority Bondholders submit to the Bondholder designated in such request a schedule of its insurance in effect on the dates sp ecified ciffed in such rem, quest and also originals or duplicate originals of such insurance policies as may be requested. If the District shall at any time fail or refuse to take ou t t or maintain insurance or to make changes in respect thereof upon appropriate request by such Bondholder or Bondholders, such Bondholder or Bondholders may take out such insur- ance on behalf and in the name of the District and the District shall pay the cost thereof, SECTION 25. In the event of the failure of the District in any respect to comply with the covenants and conditions herein contained with respect to the pro- curing of insurance, the payment of taxes, assessments, and other charges, the keep_ ing of its properties in repair and free of liens and other claf,ms or to ,comply with any other covenant contained in this Resolution, any Bondholder or Bondholders shall have the right (without prejudice to any other rights arising by reason of such de- fault) to advance or expend moneys for the purpose of procuring such insurance or p g , for the payment of insurance premiums, taxes, assessments, or other charges, or to save the properties of the District from sale or forfeiture for any unpaid tax or assessment or otherwise, or to redeem the same from any tax or other sale, or to pur- chase any tax title thereon, , or to remove or purchase any chanics' liens or other enc rance thereon, or to make repairs hhereon, or to comply with any other covenant herein contained, or to prosecute or defend any suit in relation to the properties of the District, or in any manner to protect the properties of the District and the title thereto, and all sums so advanced for any of the itforesaid purposes with in- terest thereon at the rate of five per centum (5%) per annum shall be deemed a charge upon the Revenues in the same manner as the Bonds at the tie outstanding are secured and shall be forthwith paid to the Bondholder or Bondholders making such ad- vance or advances upon demand. It shall not be obligatory for any Bondholder in making any such advances or expenditures to inquire into the validity of any such tax title, or of any of such takes or assessaEents or sales therefor, or of any such mechanics' liens or other encuaab ranee, SECTION 26. The District shall not, without the approval in writing of the Majority Bondholders, (a) construct, make, lease, purchase, or otherwise acquire any extensions or additions to the System, or enter into any contract in respect thereof, except such vxtens ions or additions as may be financed with loans evidenced by the Bonds* (b) enter into any contract or contracts for the operation or maintenance of all or any part of the System, for the purchase of electric energy or for the use by others of any part of the System; of (c) incur any expenses for legal, engineering, supervisory, accounting, or other similar services for the System, except such reason- able expenses as are incurred in the routine course of business, h g..wf SECTION 27. The District shall at all times keep proper books, records, and accounts in which full and true entries will be made of all of the dealings, business, and affairs of the District, in accordance with good accounting practice. The District shall furnish to each Bondholder: (a) not less than once each month, a statement of operations for the preceding month, including, without limitation, an analysis of the System's revenues, expenses, and consumer accounts for the preceding month and if directed by the Majority Bondholders, such statement shall be in such form and include therein such information as may be specified in such direction; and (b) within thirty (30) days after the close of each fiscal year full and complete reports, certified by its Treasurer, of its financial condition as of the end of such fiscal year and of its System operations for such period, and if requested by the Majority Bondholders, such reports shall be audited and certified by independent public accountants satisfactory to such Bondholder or Bondholders. Any Bondholder, through its agents, representatives, accountants, or attorneys, shall at all times during reasonable business hours have access to, and the right to inspect and make copies of, any or all books, records, and accounts and any or all invoices, contracts, leases, pay rolls, cancelled checks, state- ments, and other documents and papers of every kind belonging to or in the possession of the District or in anywise pertaining to its business or the System. SECTION 28. The District g hereby' covenants and agrees for the benefit of the Bondholders, that it will from time to time adopt such further resolutions or make, v:xecute, deliver or record such further instruments and further assurances or do and perform such acts and things as may now or hereafter be authorised by law, or as may reasonably be required to comply with the terms and conditions of this Resolution and the Loan Contract or with any laws of the State of California now or hereafter enacted. s _g_ SECTION 29, Any Bondholder may, at any time or ties in succession with- out notice to or the consent of the District and. upon such terms as such Bondholder may prescribe, grant to any person, firm, or corporation who shall have became obli- gated to pay all or any part of the principal of or interest on any Bond held by or indebtedness owed to such Bondholder or who may be affected by the lien hereby created, an extension of the time for the payment of such principal or interest, and after any such extension the District will remain liable for the payment of such Bond or indebtedness to the save extent as thougb `it had at the time of such extension con- sented thereto in writing. SECTION 30. In the event that any properties of the District (other than the Donner Lake System) shall be taken under the power of eminent domain, all pro- ceeds and avails therefrom, except to the extent that all Bondholders shall consent to other use and application thereof by the District, shall forthwith be paid into the Special Revenue Fund, SECTION 31, The District shall not at any time employ or enter into any con- tract for, the employment of any manager or superintendent of the System, unless such employment or si•.th contract shall first have been approved by the Majority Bondholders. If during such periods as the District shall be in default in the making of a payment or payments of principal of or interest on one or more of the Bond, the Majority Bond- holders shall at any time give notice to the District that, in their opinion, any such transmission and distribution system, transmission line or generating plant, which is part of the System, is not being efficiently operated,. and shall request the termination of the employment of any such manager or superintendent, or of any such chief operator, engineer or employee or shall request the termination of any ope- rating contract in respect of any such transmission and distribution system, trans- mission line or generating plant,which is part of the System, the District shall terminate such employement or operating, contract within thirty (30) days after the date of such notice. All contracts in respect of the employment of any such manager or superintendent, or any such chief operator, engineer or employee, or for the opera- tion of any such transmission and distribution system, transmission line or gen- erating plant, which is part of the System, shall contain provisions to permit com- pliance with the foregoing covenants. SECTION 32. The District shall well and truly observe and perform all of the covenants, agreements, terms, and conditions contained in the Loan Contract on its part to be observed or perforated. SECTION 33. If one or more of the following events (hereinafter called "events of default") shall happen, that is to say; (a) default shall be made in the payment of any installment of or on account of interest on or principal of any Bond or Bonds when and as the same shall be required to be made, and such default shall continue for thirty (30) days*, (b) default shall be made in the due observance or performance of any other of the covenants, conditions, or agreements on the past of the District in any of the Bonds or in this Resolution contained, and such default shall continue for a period of thirty (30) days after `mitten notice specifying such default and requiring the same to be remedied shall have been given to the District by any Bondholder; (c) the District shall file a petition in bankruptcy or be adjudicated a bankrupt or insolvent, or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of its property; (d) a receiver for the District or any substantial portion of its prop- erty shall be appointed and the order appointing such receiver shall not be vacated within 30 days after the entry thereof; (e) the District shall forfeit or otherwise be deprived of its cor- porate charter or franchises, permits, or licenses required to carry on any material portion of its business; or (f) a final judgment shall be entered against the District and shall remain unsatisfied or without a stay in respect thereof for a period of 30 days; 40 9- rt then in each and every such case any Bondholder may, by notice in writing to the Dis- trict and delivery of a copy thereof to the other Bondholders, declare all unpaid prin- cipal of and accrued interest on any or all notes held by such Bondholder to be due and payable immediately; and upon any such declaration all such unpaid principal and accrued interest so declared to be due and payable shall become and be 4 due and pay- able imm diate1y, anything contained Werein or in any Bond or Bonds to the contrary notwithstanding; provided, however, that if at any tfe after the unpaid principal of and accrued interest on any of the Bonds shall have been so declared to be due and payable, all payments in respect of principal and interest which shall have be- come due and payable by the terms of such Bond or Bonds shall be paid to the respect- ive Bondholders, and all other defaults hereunder and under the Bonds shall have'.-been made good or secured to the satisfaction of all of the Bondholders, then and in every such case, the Bondholder or Bondholders who shall have declared the principal of and interest on notes held by such bondholder or Bondholders to be due and payable may, by written notice to the District and delivery of a copy thereof to the other Bond" holders, annul such declaration or declarations and waive such default or defaults and the consequences thereof, but no such waiver shall extend to or affect any subsequent default or impair any right consequent thereon. SECTION 34. If one or more of the events of default shall happen the Majority Bondholders, for itself or them elves and as the agent or agents of the other Bond- holders, personally or by attorney or trustee selected by such Bondholder or Bondholders, in its or their discretion, may, in so far as not prohibited by law: (a) collect and receive all moneys then on deposit in the Special. Revenue Fund and apply said moneys ratably, first, to the payment of in- debtedness secured by the Revenues pledged herein other than the principal of or interest on the Bonds; second, to the ratable payment of interest which shall have accrued on the Bonds and which shall be unpaid; third, to the ratable payment of or on account of the unpaid principal of the Bonds* and the balance, if any, shall be paid to whosoever shall be entitled there- to; and the Board of Directors, by the adoption of this Resolution, does hereby approve such payment of the moneys in the Special, Revenue Fund to such Bondholders and does hereby expressly authorize and direct the appro- priate officers of the District, upon written demand of such Bondholders, forthwith to sign and deliver all necessary written orders or other docu- ments in writing for such payment to such`Bondholders of all moneys in the Special Revenue Fund to be applied as aforesaid; C (b) roceed to enforce the ri hts of the Bondholders under this Reno- P S lotion by mandamus or by a suit or suits its equity or at law, whether for the specific performance of any covenant or agreement contained in this Resolution or in the Bonds, or in aid of the exercise of any other right or power herein or by law or by statute 4 granted or for the enforcement of any other appropriate legal or equitable remedy as may be deemed most effectual to protect and enforce the rights of the Bondholders hereunder and to levy or cause to be Levied taxes in amounts sufficient to protect such rights* (c) upon application to a court of competent jurisdiction, have appointed, as a matter of right, a receiver of the System, including all tolls, rents, revenues, issues, income, receipts, profits, benefits, and additions derived, received or had thereof or therefrom, with power to operate and maintain the System, collect, receive and apply all revenue, income, profits and receipts arising therefrom, and prescribe all rates, tolls and k:harges, in the same way and manner as the District might do; whenever all defaults in the payment of principal of and interest on the notes and any other defaults under this. Resolution shall have been made good, such receiver shall be discharged by the court and shall surrender control of the business and possession of the property in his hands to the District; and (d) take possession and control of the System and proceed to operate the same and to collect and receive the income thereof, and after paying all necessary and proper operating expenses and all other proper disburse- ments or liabilities made or incurred in connection with such operation, use the surplus, if any there shall be, as follows: First, in the payment of all outstanding past due interest on the Bonds, so far as said net revenues will go, and paying pro rate the interest due on each Bond when there is not M 1040 - ._ -T �.-.-- .. -w.'wrtJr*r�•+sw...w.+r+w+.►aC-/'7' Mt -+-±i�'NM11+'.' enough to pay in full all of the interest due on all the Bonds, and second, if any sums shall remain after the payment of interest as afore- : said, then in the payment of the principal of the Bonds which b the P P , y► term thereof, shall be due and payable in accordance with the terms thereof, and paying pro rat a when the money ava i 1 ab l e is not sufficient to pay in full; when all legal takes and charges, and all arrears of interest, and all matured principal of the Bonds have been paid in full, the control of the business and the possession of the System shall then be restored to the Maw trict. The privilege herein granted shalt be a continuing one so often as the occasion therefor shall arise., SECTION 35. All of the provisions of this Resolution shall constitute a conow tract between the District and the Bondholders, and no amendment, alteration or modif ign cation of this Resolution shall be made which shall in any manner impair, impede or lessen the rights of the holders of the Bonds then outstanding. 4 SECTION 36. Every right or remedy herein conferred upon or reserved to the Bondholders shall be cumulative and shall be in addition to every S other right and remedy given hereunder or now or hereafter existing at law or in equity or by statute and the pursuit of any right or remedy shall not be construed as an election SECTION 37. The proper officers of the District are hereby authorised, enilm powered and directed, for and on behalf of the District and in its name, to do and P ergo form all acts and things and to execute and deliver all instruments which the shall, I1, in their discretion, deem necessary or advisable to carry out and give effect to the terms and provisions of this Resolution. SECTION 38. If any paragraph, section, subdivision, sentence clause phrase or portion of this Resolution shall. for any reason be held illegal or invalid or unenforceable, such decision shall not affect the validity of the remainingi Por t ions of this Resolution and the Board of Directors hereby declares that it would have adopted this Resolution and each and every paragraph, sections subdivision sentence clause, phrase or portion hereof and authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more paragraphs, sections, subdivis on s, sentences, clauses, phrases or portions of this Resolution may be held : ills al inm valid, or unenforceable. illegal, SECTION 39. This Resolution shall take effect immediately. PASSED AND ADOPTED THIS 17 day%of Se tembe _01*4968 . President, Board of irectors of Truckee Public Utility District CERTIFICATE it Francis Lon o ,Clerk of TRUCKEE PUBLIC UTILITYDISTRICT (herein- after called the "District"3 do hereby certify that the attached Resolution is a full, true and correct copy of the Resolution dulyadopted b the Board of Direr P y Directors of the District at a meeting of the Board of Directors of the District duly convened and held pursuant to and in accordance with the b laws of the District and the laws P 1 s of the State of California on the 17 th day of Sept ember 19 '3 and that said Resolem t ion is still in full force and effect. IN WITNESS WHEREOF, I have hereunto subscribed my name as Clerk and affixed the corporate seal of the District. IN Clerk of Truckee ubl is litY District (corporate Seal) ..11�