HomeMy WebLinkAbout84-10 electric revenue bonds DD
AUG 1 G 1983
CITY OF UKIAH
c
CITY OF UKIAH
RESOLUTION NO. 84-10
A Resolution of the City Council
of the City of Ukiah
Providing for the Issuance of
City of Ukiah
Electric Revenue Bonds
(General Bond Resolution)
Adopted August 17, 1983
TABLE OF CONTENTS
Page
Recitals . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I - Definitions; Equal Security . . . . . . . 2
Section 1.01. Definitions . . . . . . . . . . . 2
Section 1.02 . Equal Security . . . . . . . . . . 14
ARTICLE II - Authorization and Issuance of Bonds . . . 15
Section 2 .01 . Authorization of Bonds . . . . . . 15
Section 2 .02 . General Conditions for the
Issuance of Bonds . . . . . . . 16
Section 2 . 03 . Special Condition for the Issuance
of Project Bonds . . . . . . . . 19
Section 2 .04. Special Condition for the Issuance
of Refunding Bonds . . . . . . . 21
Section 2 .05. Procedure for the Issuance
of Bonds . . . . . . . . . . . . 23
Section 2 .06. Acquisition and Construction Fund 25
ARTICLE III - Terms and Provisions of Bonds . . . . . 25
Section 3 .01. Terms of Bonds . . . . . . . . . . 25
Section 3 .02 . Execution of Bonds . . . . . . . . 28
Section 3 .03 . Transfer and Payment of Bonds 29
Section 3 .04. Mutilated, Destroyed, Stolen or
Lost Bonds . . . . . . . . . . . 31
Section 3 .05. Temporary Bonds . . . . . . . . . 32
ARTICLE IV - Redemption of Bonds . . . . . . . . . . . 33
Section 4.01. Privilege of Redemption of Bonds 33
Section 4.02 . Selection of Bonds for Redemption 33
Section 4.03 . Notice of Redemption . . . . . . . 34
Section 4.04. Partial Redemption of Bonds . . . 35
Section 4.05 . Effect of Redemption of Bonds 36
Section 4.06. Disposition of Redeemed Bonds 36
ARTICLE V - Net Revenues and Net Distribution Income 36
Section 5 . 01. Receipt and Deposit of Revenues 36
Section 5 .02 . Pledge of Net Revenues and Net
Distribution Income . . . . . . 37
Section 5 .03 . Use of Revenues and Net
Distribution Income . . . . . . 38
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Page
ARTICLE VI - Covenants of the City . . . . . . . . . . 43
Section 6. 01. Punctual Payment and Performance . 43
Section 6. 02 . Against Encumbrances . . . . . . . . 44
Section 6. 03 . Against Sale or Other Disposition
of Property . . . . . . . . . . . 44
Section 6.04. Against Competitive Facilities . . . 45
Section 6.05. Against Arbitrage . . . . . . . . . 45
Section 6. 06. Acquisition and Construction of
Projects . . . . . . . . . . . 46
Section 6. 07. Maintenance and Operation of the
Enterprise; Budgets . . . . . . . 46
Section 6.08. Payment of Claims . . . . . . . . . 47
Section 6. 09. Insurance . . . . . . . . . . . 47
Section 6. 10. Accounting Records; Financial
Statements and Other Reports . . . 49
Section 6. 11. Protection of Security and Rights
of Holders . . . . . . . . . . . . 51
Section 6. 12 . Payment of Governmental Charges
and Compliance with Governmental
Regulations . . . . . . . . . . . 51
Section 6. 13 . Amount of Rates, Fees and Charges 52
Section 6. 14. Collection of Rates, Fees and
Charges . . . . . . . . . . . . . 53
Section 6. 15. Eminent Domain Proceeds . . . . . . 54
Section 6. 16. Further Assurances . . . . . . . . . 56
ARTICLE VII - The Fiscal Agent . . . . . . . . . . . . 56
Section 7 .01. The Fiscal Agent . . . . . . . . . . 56
Section 7.02 . Liability of the Fiscal Agent . . . 59
Section 7 .03 . Notice to the Fiscal Agent . . . . . 59
ARTICLE VIII - Amendment of or Supplement to
the Resolution . . . . . . . . . . . 61
Section 8.01. Amendment or Supplement by Consent
of Holders . . . . . . . . . . . . 61
Section 8.02 . Disqualified Bonds . . . . . . . . . 62
Section 8.03 . Endorsement or Replacement of Bonds
After Amendment or Supplement 63
Section 8. 04. Amendment or Supplement by Mutual
Consent . . . . . . . . . . . . . 63
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Page
ARTICLE IX - Events of Default and Remedies of
Holders . . . . . . . . . . . . . . . . 64
Section 9 .01. Events of Default and Acceleration
of Maturities . . . . . . . . . . 64
Section 9. 02 . Application of Money Upon
Acceleration . . . . . . . . . . 66
Section 9. 03 . Other Remedies of Holders . . . . . 67
Section 9. 04. Non-waiver . . . . . . . 68
Section 9 . 05. Actions by Fiscal Agent as
Attorney-in-Fact . . . . . . . . . 69
Section 9 .06. Remedies Not Exclusive . . . . . . . 70
ARTICLE X - Defeasance . . . . . . . . . . . . . . . . 70
Section 10.01. Discharge of Bonds . . . . . . . . . 70
Section 10.02 . Unclaimed Money . . . . . . . . . . 73
ARTICLE XI - Miscellaneous . . . . . . . . . . . . . . 74
Section 11 .01 . Liability of City Limited to Net
Revenues and Net Distribution
Income . . . . . . . . . . . . . . 74
Section 11 .02 . Benefits of the Resolution Limited
to Parties . . . . . . . . . . . . 75
Section 11.03 . Successor is Deemed Included in All
References to Predecessor . . . . 75
Section 11. 04. Execution of Documents by Holders 76
Section 11 . 05. Deposit and Investment of Money
in Accounts and Funds . . . . . . 77
Section 11 .06. Waiver of Personal Liability . . . . 79
Section 11 .07. Acquisition of Bonds by City . . . . 79
Section 11.08. Content of Certificates and
Reports . . . . . . . . . . . . . 79
Section 11.09. Publication for Successive Weeks 80
Section 11. 10. Accounts and Funds . . . . . . 81
Section 11. 11 . Article and Section Headings and
References . . . . . . . . . . . . 81
Section 11. 12 . Partial Invalidity . . . . . . . . . 82
Section 11 . 13 . Repeal of Inconsistent Resolutions 82
Section 11 . 14. Effective Date of the Resolution . 82
Adoption . . . . . . . . . . . . . . . . . . . . . . 83
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CITY OF UKIAH
RESOLUTION NO. 84-10
A Resolution of the City Council
of the City of Ukiah
Providing for the Issuance of
City of Ukiah
Electric Revenue Bonds
(General Bond Resolution)
WHEREAS, the City of Ukiah now owns and operates a
municipal electric generation and transmission system; and
WHEREAS, the City Council of the City of Ukiah has
determined that the public interest and necessity do now
require and may in the future further require the acquisition
and construction of additions, betterments, extensions or
improvements to such municipal electric generation and
transmission system; and
WHEREAS, the City Council of the City of Ukiah has
determined to finance the cost of the acquisition and
construction of such additions, betterments, extensions or
improvements by the issuance of electric revenue bonds as
authorized by law;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL
OF THE CITY OF UKIAH, AS FOLLOWS:
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ARTICLE I
DEFINITIONS; EQUAL SECURITY
SECTION 1 .01. Definitions. Unless the context
otherwise requires, the terms defined in this section shall
for all purposes hereof and of any Supplemental Resolution
and of the Bonds and of any certificate, opinion, report,
request or other document mentioned herein or therein have
the meanings defined herein, the following definitions to be
equally applicable to both the singular and plural forms of
any of the terms defined herein:
Accountant' s Report
The term "Accountant' s Report" means a report
signed by an Independent Certified Public Accountant.
Acquisition and Construction Fund
The term "Acquisition and Construction Fund" means
the fund by that name established in Section 2 .06.
Bonds, Serial Bonds, Term Bonds
The term "Bonds" means all electric revenue bonds
of the City authorized by and at any time Outstanding
pursuant hereto that are executed, issued and delivered in
accordance with Article II . The term "Serial Bonds" means
Bonds for which no sinking fund payments are established.
The term "Term Bonds" means Bonds which are payable on or
before their specified maturity dates from sinking fund
payments established for the purpose of redeeming or paying
such Bonds on or before their specified maturity dates.
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Bond Reserve Account
The term "Bond Reserve Account" means the account
by that name established in Section S . 03 .
Certificate of the City
The term "Certificate of the City" means an
instrument in writing signed by the Mayor, or by any other
officer of the City duly authorized by the Council for that
purpose, and by the City Clerk, with the seal of the City
affixed.
City
The term "City" means the City of Ukiah, a
municipal corporation duly organized and existing under and
by virtue of the Constitution and laws of the State of
California.
City Clerk
The term "City Clerk" means the City Clerk of the
City.
Costs of Acquisition and Construction
The term "Costs of Acquisition and Construction"
means all costs of the design, acquisition and construction
of a Project and all costs incidental thereto or connected
therewith, including premiums for indemnity and surety bonds
and insurance during construction, engineering fees and
expenses, legal fees and expenses, fees and expenses of
financing consultants, financing costs, audit fees, amounts,
if any, required by any Supplemental Resolution to be
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deposited in the Interest and Principal Fund or in the
Reserve Fund upon the issuance of any Series of Bonds for
such Project, payments when due on any indebtedness of the
City (other than Bonds) incurred for such Project, costs of
equipment, machinery and supplies and initial working capital
and reserves required by the City for the commencement of
operation of such Project and any other costs properly
attributable to such design, acquisition and construction
determined in accordance with Generally Accepted Accounting
Principles, and including reimbursement to the City for any
of the foregoing items theretofore paid by it.
Council
The term "Council" means the City Council of the
City.
Debt Service
The term "Debt Service" means, for any Fiscal Year,
the sum of ( 1) the interest accruing during such Fiscal Year
on all Outstanding Bonds, assuming that all Outstanding
Serial Bonds are retired as scheduled and that all
Outstanding Term Bonds are redeemed or paid as scheduled from
sinking fund payments established for that purpose (except to
the extent that such interest is to be paid as a Cost of
Acquisition and Construction) , (2 ) that portion of the
principal amount of all Outstanding Serial Bonds maturing by
their terms on the next succeeding June 1 that would have
accrued during such Fiscal Year if such principal amount were
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deemed to accrue daily in equal amounts from the next
preceding June 1, and (3 ) that portion of the principal
amount of all Outstanding Term Bonds required to be redeemed
or paid on the next succeeding June 1 (together with the
redemption premiums, if any, thereon) that would have accrued
during such Fiscal Year if such principal amount (and
redemption premiums) were deemed to accrue daily in equal
amounts from the next preceding June 1 .
Engineer' s Report
The term "Engineer' s Report" means a report signed
by an Independent Engineer.
Enterprise
The term "Enterprise" means the whole and each and
every part of the existing municipal electric generation and
transmission system of the City together with all facilities
hereafter acquired and constructed for such system and
determined by the Council to be a part of the Enterprise,
including all additions, betterments, extensions or
improvements to such system or any part thereof hereafter
acquired and constructed.
Event of Default
The term "Event of Default" means an event by that
name described in Section 9 .01.
Federal Securities
The term "Federal Securities" means United States
Treasury notes, bonds, bills or certificates of indebtedness,
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or other evidences of indebtedness for which the faith and
credit of the United States of America are pledged for the
payment of interest and principal, obligations issued by
banks for cooperatives, federal land banks, federal
intermediate credit banks, federal home loan banks, the
Federal Home Loan Bank Board or the Tennessee Valley
Authority; obligations, participations or other instruments
of or issued by, or fully guaranteed as to interest and
principal by, the Federal National Mortgage Association;
obligations, participations or other instruments of or issued
by a federal agency or a United States of America
government-sponsored enterprise fully guaranteed as to
interest and principal by the United States of America; and
also any securities now or hereafter authorized both the
interest on and principal of which are guaranteed directly or
indirectly by the full faith and credit of the United States
of America, as and to the extent that such securities are
eligible for the legal investment of City funds.
Financial Newspaper
The term "Financial Newspaper" means The Wall
Street Journal or The Daily Bond Buyer, or any other
newspaper or journal publishing financial news selected by
the Fiscal Agent that is printed in the English language, is
customarily published on each business day and is circulated
in San Francisco, California.
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Fiscal Agent
The term "Fiscal Agent" means Bank of America,
National Trust and Savings Association, a banking corporation
duly organized and existing under and by virtue of the laws
of the State of California and having a principal corporate
trust office in San Francisco, California, and its successors
and assigns, or any other bank or trust company which may at
any time be substituted in its place as provided in
Section 7 . 01 .
Fiscal Year
The term "Fiscal Year" means the twelve-month
period terminating on June 30 of each year, or any other
annual accounting period hereafter selected and designated by
the City as its Fiscal Year in accordance with applicable law.
Generally Accepted Accounting Principles
The term "Generally Accepted Accounting Principles"
means the uniform accounting and reporting procedures set
forth in publications of the American Institute of Certified
Public Accountants or its successor and the National Council
on Governmental Accounting or its successor, or by any other
generally accepted authority on such procedures, and
includes, as applicable, the standards set forth by the
Financial Accounting Standards Board or its successor. In
the event of any dispute arising hereunder, the term
"Generally Accepted Accounting Principles" shall be
construed, as nearly as practicable, in conformity with the
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uniform system of accounts and accounting rules and
regulations thereunder prescribed by the Federal Energy
Regulatory Commission or its successor for private power
companies which are subject to its jurisdiction and which are
engaged in the business of acquiring, constructing,
maintaining and operating electric generation, transmission
and distribution systems comparable to the municipal electric
generation, transmission and distribution system of the City.
Holder
The term "Holder" means any person who shall be the
registered owner of any Outstanding Bond.
Independent Certified Public Accountant
The term "Independent Certified Public Accountant"
means any certified public accountant or firm of such
accountants duly licensed and entitled to practice and
practicing as such under the laws of the State of California,
appointed and paid by the City, and who, or each of whom --
( 1) is in fact independent and not under the
domination of the City;
(2) does not have a substantial financial interest,
direct or indirect, in the operations of the City; and
(3 ) is not connected with the City as a
councilmember, officer or employee of the City, but who
may be regularly retained to audit the accounting
records of and make reports thereon to the City.
8
Independent Engineer
The term "Independent Engineer" means any
registered engineer or firm of registered engineers of
national reputation in engineering matters relating to the
acquisition, construction, maintenance and operation of
municipal electric generation, transmission and distribution
systems, appointed and paid by the City, and who, or each of
whom --
(1) is in fact independent and not under the
domination of the City;
(2 ) does not have a substantial financial interest,
direct or indirect, in the operations of the City; and
(3) is not connected with the City as a
councilmember, officer or employee of the City, but who
may be regularly retained to make reports to the City.
Interest Account
The term "Interest Account" means the account by
that name established in Section 5.03 .
Law
The term "Law" means the Revenue Bond Law of 1941
(being Chapter 6, Part 1, Division 2, Title S of the
Government Code of the State of California, as amended) and
all laws amendatory thereof or supplemental thereto.
Maintenance and Operation Account
The term "Maintenance and Operation Account" means
the account by that name established in Section 5 . 03 .
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Maintenance and Operation Costs of the Enterprise
The term "Maintenance and Operation Costs of the
Enterprise" means the reasonable and necessary costs paid or
incurred by the City for maintaining and operating the
Enterprise, determined in accordance with Generally Accepted
Accounting Principles, including all costs of electricity
generated or purchased by the City for resale through the
Enterprise, and including all reasonable expenses of
management and repair and other expenses necessary to
maintain and preserve the Enterprise in good repair and
working order, and including all administrative costs of the
City that are charged directly or apportioned to the
operation of the Enterprise, such as salaries and wages of
employees, overhead, insurance, taxes (if any) and insurance
premiums, and including all other necessary and reasonable
costs of the City or charges required to be paid by it to
comply with the terms of the Law or hereof or of the Bonds,
such as compensation, reimbursement and indemnification of
the Fiscal Agent and fees and expenses of Independent
Certified Public Accountants and Independent Engineers; but
excluding in all cases depreciation, replacement and
obsolescence charges or reserves therefor and amortization of
intangibles or other bookkeeping entries of a similar nature,
and excluding any payments of Debt Service.
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Maximum Annual Debt Service
The term "Maximum Annual Debt Service" means the
greatest annual Debt Service in any Fiscal Year during the
period beginning with the then current Fiscal Year and ending
with the Fiscal Year in which the last Outstanding Bonds
mature by their terms.
Mayor
The term "Mayor" means the Mayor of the City.
Net Distribution Income
The term "Net Distribution Income" means, for any
Fiscal Year, the net income and revenue received or
receivable by the City for providing electric delivery
service during such Fiscal Year, determined in accordance
with Generally Accepted Accounting Principles.
Net Revenues
The term "Net Revenues" means, for any Fiscal Year,
the Revenues during such Fiscal Year less the Maintenance and
Operation Costs of the Enterprise during such Fiscal Year.
Outstanding
The term "Outstanding, " when used as of any
particular time with reference to Bonds, means ( subject to
the provisions of Section 8. 02) all Bonds except --
( 1) Bonds cancelled by the Fiscal Agent or
delivered to the Fiscal Agent for cancellation;
(2) Bonds paid or deemed to have been paid within
the meaning of Section 10.01; and
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(3 ) Bonds in lieu of or in substitution for which
other Bonds shall have been executed, issued and
delivered by the City pursuant to Section 3 .04.
Principal Account
The term "Principal Account" means the account by
that name established in Section 5 . 03 .
Project
The term "Project" means any additions,
betterments, extensions or improvements to the Enterprise
designated by the Council as a designated Project, the
acquisition and construction of which 'is to be financed with
the proceeds of any Bonds.
Resolution
The term "Resolution" means this Resolution
No. 84-10 adopted by the Council on August 17, 1983 under and
pursuant to the Law, as originally adopted and as it may from
time to time be amended or supplemented by all Supplemental
Resolutions adopted pursuant to the provisions hereof.
Revenue Fund
The term "Revenue Fund" means the fund by that name
established in Section 5.02 .
Revenues
The term "Revenues" means all gross income and
revenue received or receivable by the City from the ownership
or operation of the Enterprise, determined in accordance with
Generally Accepted Accounting Principles, including all
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rates, fees and charges received by the City for providing
electric generation and transmission service and the other
services of the Enterprise and all proceeds of insurance
covering business interruption loss relating to the
Enterprise and all other income and revenue howsoever derived
by the City from the ownership or operation of the Enterprise
or arising from the Enterprise, and including all sums
required by Section 11.05 to be deposited in or transferred
to the Revenue Fund, but excluding refundable deposits made
to establish credit and advances or contributions in aid of
construction.
Series
The term "Series" means all Bonds authorized and
established pursuant to a Supplemental Resolution as
constituting a Series and delivered on original issuance in a
simultaneous transaction pursuant to Article II , and any
Bonds thereafter executed and delivered in lieu thereof or in
substitution therefor pursuant to Section 3 .04.
Supplemental Resolution
The term "Supplemental Resolution" means any
resolution then in full force and effect which has been duly
adopted by the Council under and pursuant to the Law at a
meeting of the Council duly convened and held, at which a
quorum was present and acted thereon, amendatory hereof or
supplemental hereto; but only if and to the extent that such
Supplemental Resolution is specifically authorized hereunder.
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Surplus Account
The term "Surplus Account" means the account by
that name established in Section 5 .03 .
Written Request of the City
The term "Written Request of the City" means an
instrument in writing signed by the Mayor, or by any other
officer of the City duly authorized by the Council for that
purpose, and by the City Clerk, with the seal of the City
affixed.
SECTION 1. 02 . Equal Security. In consideration of
the acceptance of the Bonds by the Holders thereof, the
Resolution shall be deemed to be and shall constitute a
contract between the City and the Holders from time to time
to secure the full and final payment of the interest on and
principal of and redemption premiums, if any, on all Bonds
which may from time to time be authorized, executed, issued
and delivered hereunder, subject to the agreements,
conditions, covenants and terms contained herein; and all
agreements, conditions, covenants and terms contained herein
required to be observed or performed by or on behalf of the
City shall be for the equal and proportionate benefit,
security and protection of all Holders without distinction,
preference or priority as to security or otherwise of any
Bonds over any other Bonds by reason of the Series thereof or
the number or date thereof or the time of authorization,
sale, execution, issuance or delivery thereof or otherwise
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for any cause whatsoever, except as expressly provided herein
or therein.
ARTICLE II
AUTHORIZATION AND ISSUANCE OF BONDS
SECTION 2 .01 . Authorization of Bonds. Bonds
designated as "City of Ukiah Electric Revenue Bonds" are
hereby authorized to be issued by the City under and pursuant
to the Law and under and pursuant hereto, and the maximum
principal amount of Bonds which may be issued hereunder is
not limited; subject, however, to the right of the City,
which is hereby reserved, to limit or restrict the aggregate
principal amount of Bonds -which may at any time be issued or
Outstanding hereunder. Bonds may be issued in one or more
Series as from time to time shall be authorized and
established by the City pursuant to one or more Supplemental
Resolutions. The designation of the Bonds shall include, in
addition to the name "City of Ukiah Electric Revenue Bonds, "
such further appropriate particular designation added to or
incorporated in the title for the Bonds of each Series as the
City may determine or as shall be required by the Law, and
each Bond shall bear upon its face the designation so
determined for the Series to which it belongs. The Bonds may
contain or have endorsed thereon such other descriptive
provisions, specifications and words not inconsistent with
the provisions hereof as may be desirable or necessary to
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comply with custom, the rules of any securities exchange or
commission or brokerage board or otherwise as may be
determined by the City prior to the delivery thereof.
SECTION 2 . 02 . General Conditions for the Issuance
of Bonds. The City may at any time issue a Series of Bonds
payable from the Net Revenues and the Net Distribution Income
as provided herein and secured by a pledge of and charge and
lien upon the Net Revenues and the Net Distribution Income as
provided herein equal to the pledge, charge and lien securing
all other Series of Bonds issued or to be issued hereunder,
but only subject to the following general conditions (in
addition to the special conditions set forth in Sections 2 .03
or 2 .04, as the same may be applicable) , which are hereby
made conditions precedent to the issuance of such Series of
Bonds:
(a) The issuance of such Series of Bonds shall
have been authorized under and pursuant to the Law and under
and pursuant hereto and shall have been provided for by a
Supplemental Resolution which shall specify the following:
( 1) The purpose for which such Series of
Bonds is to be issued; provided that the proceeds
of sale of such Series of Bonds shall be applied
solely for (i) the purpose of providing funds to
acquire and construct a Project, including payment
of costs incidental to or connected with the
acquisition and construction of such Project,
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and/or (ii ) the purpose of providing funds to
refund or retire any Series of Bonds then
Outstanding, including payment of costs incidental
to or connected with the refunding or retirement of
such Series of Bonds;
(2) The principal amount and designation of
such Series of Bonds and the denomination or
denominations of the Bonds of such Series and the
method of numbering the Bonds of such Series;
(3 ) The date, the maturity date or dates, the
interest payment dates and the sinking fund payment
dates, if any, for such Series of Bonds; provided
that (i ) no maturity date shall be earlier than one
year after the date of such Series of Bonds,
(ii ) each maturity date shall fall upon a June 1,
(iii ) the first interest payment date shall be on
the June 1 following the date of such Series of
Bonds and subsequent interest payment dates shall
be on the succeeding December 1 and June 1 of each
year, (iv) all Bonds of like maturity shall be
identical in all respects, except as to number or
denomination, and (v) serial maturities of Serial
Bonds or sinking fund payments for Term Bonds, or
any combination thereof, shall be established to
provide for the payment,
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redemption or retirement of such Series of Bonds on
or before their respective maturity dates;
(4) The redemption premiums and terms, if
any, for such Series of Bonds;
(5) The form of such Series of Bonds;
(6) The amount, if any, to be deposited from
the proceeds of sale of such Series of Bonds in the
Interest and Principal Fund and provisions
concerning its use to pay interest on such Series
of Bonds;
(7) The amount, if any, to be deposited from
the proceeds of sale of such Series of Bonds in the
Bond Reserve Account; provided that the Bond
Reserve Account shall be increased at the time that
such Series of Bonds becomes Outstanding to an
amount at least equal to the Maximum Annual Debt
Service on all then Outstanding Bonds and on such
Series of Bonds, and an amount at least equal to
the Maximum Annual Debt Service on all Outstanding
Bonds shall thereafter be maintained in the Bond
Reserve Acount;
(8) The amount to be deposited from the
proceeds of sale of such Series of Bonds in the
applicable account within the Acquisition and
Construction Fund; and
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(9) Such other provisions as are appropriate
or necessary and not inconsistent with the
provisions hereof.
(b) The City shall be in compliance with all
agreements, conditions, covenants and terms contained herein
required to be observed or performed by it.
Nothing contained herein shall limit the issuance
of any electric revenue bonds of the City payable from the
Net Revenues and the Net Distribution Income as provided
herein and secured by a pledge of and charge and lien upon
the Net Revenues and the Net Distribution Income as provided
herein if after the issuance and delivery of such electric
revenue bonds none of the Bonds theretofore issued hereunder
will be Outstanding.
SECTION 2 .03 . Special Condition for the Issuance
of Project Bonds. One or more Series of Bonds (other than
the initial Series of Bonds issued hereunder) may be issued
from time to time in such principal amount for such Series as
is determined by the City for the purpose of providing funds
to acquire and construct a Project, including payment of
costs incidental to or connected with the acquisition and
construction of such Project, but only subject to the
following special condition (in addition to the general
conditions set forth in Section 2 .02 ) which is hereby made a
condition precedent to the issuance of such Series of Bonds,
namely, that the Net Revenues for any period of twelve ( 12 )
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consecutive calendar months within the twenty-four (24)
calendar month period next preceding the date of the adoption
by the Council of the Supplemental Resolution authorizing the
issuance of such Series of Bonds, as shown by an Accountant' s
Report on file with the Fiscal Agent; plus
(i ) an allowance for Net Revenues that would have
been derived from each addition, betterment, extension
or improvement to the Enterprise which was acquired and
constructed prior to the adoption of such Supplemental
Resolution but which, during all or any part of such
twelve-month period, was not in existence, in an amount
equal to the estimated additional Net Revenues that
would have been derived from each such addition,
betterment, extension or improvement if it had been
acquired and constructed prior to the beginning of such
twelve-month period, as shown by an Engineer' s Report on
file with the Fiscal Agent; and
(ii) an allowance for Net Revenues that would have
been derived from any increase in the rates, fees and
charges fixed and prescribed for the electric generation
and transmission service provided by the Enterprise
which became effective prior to the adoption of such
Supplemental Resolution but which, during all or any
part of such twelve-month period, was not in effect, in
an amount equal to the estimated additional Net Revenues
that would have been derived from such increase in
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rates, fees and charges if it had been in effect prior
to the beginning of such twelve-month period, as shown
by an Engineer' s Report on file with the Fiscal Agent;
shall have produced a sum equal to at least one hundred
twenty-five per cent ( 125%) of the Maximum Annual Debt
Service on all then Outstanding Bonds and such Series of
Bonds.
SECTION 2 . 04. Special Condition for the Issuance
of Refunding Bonds. One or more Series of Bonds may be
issued from time to time in such principal amount for such
Series as is determined by the City for the purpose of
providing funds to refund or retire any Series of Bonds then
Outstanding, including payment of costs incidental to or
connected with the refunding or retirement of such Series of
Bonds, but only subject to the following special condition
(in addition to the general conditions set forth in
Section 2 .02) which is hereby made a condition precedent to
the issuance of such Series of Bonds, namely, that
(a) the Net Revenues for any period of twelve ( 12 )
consecutive calendar months within the twenty-four (24)
calendar month period next preceding the date of the adoption
by the Council of the Supplemental Resolution authorizing the
issuance of such Series of Bonds, as shown by an Accountant' s
Report on file with the Fiscal Agent; plus
(i ) an allowance for Net Revenues that would have
been derived from each addition, betterment, extension
21
or improvement to the Enterprise which was acquired and
constructed prior to the adoption of such Supplemental
Resolution but which, during all or any part of such
twelve-month period, was not in existence, in an amount
equal to the estimated additional Net Revenues that
would have been derived for each such addition,
betterment, extension or improvement if it had been
acquired and constructed prior to the beginning of such
twelve-month period, as shown by an Engineer' s Report on
file with the Fiscal Agent; and
(ii ) an allowance for Net Revenues that would have
been derived from any increase in the rates, fees and
charges fixed and prescribed for the electric generation
and transmission service provided by the Enterprise
which became effective prior to the adoption of such
Supplemental Resolution but which, during all or any
part of such twelve-month period, was not in effect, in
an amount equal to the estimated additional Net Revenues
that would have been derived from such increase in
rates, fees and charges if it had been in effect prior
to the beginning of such twelve-month period, as shown
by an Engineer' s Report on file with the Fiscal Agent;
shall have produced a sum equal to at least one hundred
twenty-five per cent ( 125%) of the Maximum Annual Debt
Service on all then Outstanding Bonds (except the Series of
Bonds to be refunded or retired) and such Series of Bonds; or
22
(b) The Debt Service in each Fiscal Year during
the period beginning with the then current Fiscal Year and
ending with the Fiscal Year in which the last Outstanding
Bonds not being refunded or retired mature by their terms
will not be increased by reason of the issuance of such
Series of Bonds.
SECTION 2 .05 . Procedure for the Issuance of
Bonds. At any time after the sale of any Series of Bonds in
accordance with the Law, such Series of Bonds shall be
executed by the City for issuance hereunder and shall be
delivered to the Fiscal Agent and thereupon shall be
authenticated and delivered by the Fiscal Agent, but only
upon receipt by the Fiscal Agent of the following documents
or money:
(a) A certified copy of the Supplemental
Resolution authorizing the issuance of such Series of Bonds;
(b) A Written Request of the City as to the
delivery of such Series of Bonds;
(c) An Opinion of Counsel to the effect that
(i ) the Council has the right and power under the Law to
adopt the Resolution and all Supplemental Resolutions thereto
and the Resolution and all such Supplemental Resolutions have
been duly and lawfully adopted by the Council, are in full
force and effect and are valid and binding upon the City and
enforceable in accordance with their terms (except as
enforcement may be limited by bankruptcy, insolvency,
23
reorganization and other similar laws relating to the
enforcement of creditors' rights) and no other authorization
for the adoption thereof is required; (ii) the Resolution and
all Supplemental Resolutions thereto create the valid pledge
of and charge and lien upon the Net Revenues and the Net
Distribution Income which they purport to create as provided
therein, subject to the application thereof to the purposes
and on the terms and conditions permitted thereby; and
(iii ) the Bonds of such Series are valid and binding special
obligations of the City enforceable in accordance with their
terms (except as enforcement may be limited by bankruptcy,
insolvency, reorganization and other similar laws relating to
the enforcement of creditors' rights) and the terms of the
Law and hereof and entitled to the benefits of the Law and
hereof, and the Bonds of such Series have been duly and
validly authorized, executed, issued and delivered in
accordance with the Law and herewith;
(d) A Certificate of the City containing such
statements as may be reasonably necessary to show compliance
with the requirements hereof.-
(e)
ereof;(e) The proceeds of sale of such Series of Bonds;
and
(f) Such further documents or money as are
required by the provisions hereof or by the provisions of the
Supplemental Resolution authorizing the issuance of such
Series of Bonds.
24
SECTION 2 .06. Acquisition and Construction Fund.
There is hereby created in the treasury of the City a fund to
be known as the Acquisition and Construction Fund. The City
shall establish within the Acquisition and Construction Fund
a separate account for each Project, and there shall be
deposited in the account established for each Project the
amount required to be deposited therein by the provisions of
each Supplemental Resolution. The amount in each such
account shall be applied to the payment of the Costs of
Acquisition and Construction of the Project for which such
account was established; provided that any remaining amount
in each such account, after the completion of such purpose,
shall be deposited as provided in each Supplemental
Resolution.
ARTICLE III
TERMS AND PROVISIONS OF BONDS
SECTION 3 . 01 . Terms of Bonds.
(a) The interest on and principal of and
redemption premiums, if any, on the Bonds shall be payable in
lawful money of the United States of America at the office of
the Fiscal Agent.
(b) The Bonds of each Series shall be issued as
fully registered Bonds in such denominations as may be
authorized in the Supplemental Resolution authorizing the
issuance of the Bonds of such Series (but not to exceed the
principal amount of Bonds of such Series maturing on any one
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date) and shall be dated as provided in such Supplemental
Resolution. The Bonds of each Series shall be numbered in
consecutive numerical order upward in the order of their
issuance.
(c) Each Bond shall bear interest from the
interest payment date next preceding the date of registration
thereof, unless such date of registration is an interest
payment date, in which event it shall bear interest from such
date, or unless such date of registration is prior to the
first interest payment date, in which event it shall bear
interest from its date; provided, however, that if at the
time of registration of any Bond interest is then in default
on the Outstanding Bonds of such Series, such Bond shall bear
interest from the interest payment date to which interest has
previously been paid or made available for payment on the
Outstanding Bonds of such Series. Payment of interest on the
Bonds due on or before the maturity or prior redemption
thereof shall be made only to the person whose name appears
in the registration books required to be kept by the Fiscal
Agent pursuant to Section 3 .03 as the registered owner
thereof, such interest to be paid by check mailed to such
registered owner at his address as it appears on such books
or at such other address as he may have filed with the Fiscal
Agent for that purpose. Payment of the principal of and
redemption premiums, if any, on the Bonds shall be made only
26
on the surrender thereof at the office of the Fiscal Agent at
maturity or on redemption prior to maturity.
(d) The Bonds shall recite in substance that the
interest on and principal of and redemption premiums, if any,
on the Bonds are payable solely from the Net Revenues and the
Net Distribution Income pledged for the payment thereof, and
that the City is not obligated to pay the Bonds except from
the Net Revenues and the Net Distribution Income; that the
general fund of the City is not liable and the full faith and
credit or taxing power of the City is not pledged for the
payment of the interest on or principal of or redemption
premiums, if any, on the Bonds, and no tax or assessment
shall ever be levied or collected to pay the interest on or
principal of or redemption premiums, if any, on the Bonds;
and that the Bonds are not secured by a legal or equitable
pledge of or charge, lien or encumbrance upon any of the
property of the City or any of its income or receipts except
the Net Revenues and the Net Distribution Income as provided
herein, and neither the payment of the interest on or
principal of or redemption premiums, if any, on the Bonds is
a general debt, liability or obligation of the City.
(e) From and after the issuance of the Bonds of
each Series the findings and determinations of the Council
respecting that Series shall be conclusive evidence of the
existence of the facts so found and determined in any action
or proceeding in any court in which the validity of such
27
Bonds is at issue, and no bona fide purchaser of any of such
Bonds shall be required to see to the existence of any fact
or to the performance of any condition or to the taking of
any proceeding required prior to such issuance or to the
application of the purchase price paid for such Bonds. The
validity of the issuance of each Series of Bonds shall not be
dependent on or affected in any way by (i ) any proceedings
taken by the City for the acquisition and construction of any
Project, or ( ii ) any contracts made by the City in connection
therewith, or (iii ) the failure to complete the acquisition
and construction of any Project. The recital contained in
the Bonds that the Bonds are issued under and pursuant to the
Law and under and pursuant hereto shall be conclusive
evidence of their validity and of the regularity of their
issuance and all Bonds shall be incontestable from and after
their issuance. Bonds shall be deemed to be issued, within
the meaning hereof, whenever the definitive Bonds (or any
temporary Bonds exchangeable therefor) have been delivered to
the purchaser thereof and the purchase price thereof
received, or in the case of Bonds to be refunded or retired
through exchange whenever such exchange has been made.
SECTION 3 . 02 . Execution of Bonds. The Bonds shall
be signed on behalf of the City by the facsimile signature of
the Mayor and by the manual signature of the City Clerk, and
the seal of the City shall be impressed thereon by facsimile
reproduction. In case any officer of the City who shall have
28
signed any of the Bonds shall cease to be such officer before
the Bonds so signed shall have been delivered to the
purchaser by the Fiscal Agent, such Bonds may nevertheless be
delivered and issued and, upon such delivery and issuance,
shall be as binding upon the City as though such officer who
signed the same had continued to be such officer until such
delivery and issuance. Also, any Bond may be signed on
behalf of the City by any person who on the actual date of
the execution of such Bond shall be the proper officer of the
City, although on the nominal date of such Bond such person
shall not have been such officer of the City. Only those
Bonds that bear thereon a certificate of authentication
executed by the Fiscal Agent shall be entitled to any
benefit, protection or security hereunder or be valid or
obligatory for any purpose, and such certificate of the
Fiscal Agent shall be conclusive evidence that the Bonds so
authenticated have been duly authorized, executed, issued and
delivered hereunder and are entitled to the benefits hereof.
SECTION 3 .03 . Transfer and Payment of Bonds. The
Fiscal Agent will keep at its office sufficient books for the
registration and transfer of the Bonds, which books shall at
all times be open to inspection by the City or by any
Holder. Any Bond may, in accordance with its terms, be
transferred on such books by the person in whose name it is
registered, in person or by his duly authorized attorney,
upon payment by the Holder requesting such transfer of any
29
tax or other governmental charge required to be paid with
respect to such transfer and upon surrender of such Bond for
cancellation accompanied by delivery of a duly executed
written instrument of transfer in a form approved by the
Fiscal Agent, except that no such exchange shall be required
to be made during the fifteen ( 15) days preceding each
interest payment date. Whenever any Bond or Bonds shall be
surrendered for transfer, the City shall execute and the
Fiscal Agent shall authenticate and deliver a new Bond or
Bonds for a like aggregate principal amount. The City shall
not be required to transfer any Bond which has been selected
for redemption in whole or in part, except the unredeemed
portion of such Bond selected for redemption in part, from
and after the day of the first publication of a notice of
redemption of such Bond selected for redemption in whole or
in part under Article IV.
The City and the Fiscal Agent may deem and treat
the registered owner of any Bond as the absolute owner of
such Bond for the purpose of receiving payment thereof and
for all other purposes, whether such Bond shall be overdue or
not, and neither the City nor the Fiscal Agent shall be
affected by any notice or knowledge to the contrary; and
payment of the interest on and principal of and redemption
premium, if any, on such Bond shall be made only to such
registered owner, which payments shall be valid and effectual
30
to satisfy and discharge liability on such Bond to the extent
of the sum or sums so paid.
SECTION 3 . 04. Mutilated, Destroyed, Stolen or Lost
Bonds. In case any Bond shall become mutilated in respect of
the body of such Bond or shall be believed by the City to
have been destroyed, stolen or lost, upon proof of ownership
satisfactory to the City and upon the surrender of such
mutilated Bond at the office of the Fiscal Agent, or upon the
receipt of evidence satisfactory to the City of such
destruction, theft or loss and upon receipt of indemnity
satisfactory to the City, and also upon payment of all
expenses incurred by the City in the premises, the City shall
execute and the Fiscal Agent shall authenticate and deliver
at such office a new Bond or Bonds of the same Series and
maturity for the same aggregate principal amount of like
tenor and date and bearing the same number or numbers and
with such notations as the City shall determine in exchange
and substitution for and upon cancellation of the mutilated
Bond or in lieu of and in substitution for the Bond so
destroyed, stolen or lost.
If any such destroyed, stolen or lost Bond shall
have matured or shall have been called for redemption,
payment of the amount due thereon may be made by the City
upon receipt of like proof, indemnity and payment of expenses.
Any such duplicate Bonds issued pursuant to this
section shall be entitled to equal and proportionate benefits
31
with all other Bonds issued hereunder, and the City and the
Fiscal Agent shall not be required to treat both the original
Bond and any duplicate Bond as being Outstanding for the
purpose of determining the principal amount of Bonds which
may be issued hereunder or for the purpose of determining any
percentage of Bonds Outstanding hereunder, but both the
original and the duplicate Bond shall be treated as one and
the same.
SECTION 3 .OS . Temporary Bonds. Any Series of
Bonds may be initially issued in temporary form exchangeable
for definitive Bonds when ready for delivery. The temporary
Bonds shall be printed, lithographed or typewritten, shall be
of such denominations as may be determined by the City, shall
be issued in fully registered form and shall contain such
reference to any of the provisions hereof as may be
appropriate. Each temporary Bond shall be executed by the
City upon the same conditions and in substantially the same
manner as the definitive Bonds. If the City issues temporary
Bonds, it will execute and furnish definitive Bonds without
delay, and thereupon the temporary Bonds may be surrendered
in exchange therefor at the office of the Fiscal Agent, and
the Fiscal Agent shall deliver in exchange for such temporary
Bonds an equal aggregate principal amount of definitive Bonds
of authorized denominations of the same Series and maturity
or maturities, and until so exchanged, the temporary Bonds
32
shall be entitled to the same benefits as definitive Bonds
issued hereunder.
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01. Privilege of Redemption of Bonds.
Any Series of Bonds subject to redemption prior to maturity
pursuant to a Supplemental Resolution shall be redeemable,
upon notice being given as provided in this article, at such
times, upon payment of such redemption premiums, if any, and
upon such terms (in addition to and consistent with the terms
contained in this article) as may be specified in the
Supplemental Resolution authorizing the issuance of the Bonds
of such Series; provided that if less than all the Oustanding
Bonds of any Series are to be redeemed at any one time, the
Bonds of such Series of the latest maturity date or dates
shall be redeemed prior to or simultaneously with the
redemption of any Bonds of such Series maturing prior thereto.
SECTION 4.02 . Selection of Bonds for Redemption.
If less than all the Outstanding Bonds of any Series of any
one maturity date are to be redeemed at any one time, the
Fiscal Agent shall select the Bonds of such maturity date to
be redeemed in any manner that it deems appropriate and fair,
and the Fiscal Agent shall promptly notify the City in
writing of the numbers of the Bonds selected for redemption.
33
SECTION 4.03 . Notice of Redemption. The Fiscal
Agent shall cause notice of any redemption to be published
once a week for two (2 ) successive weeks in a Financial
Newspaper, with the first publication to be not less than
thirty (30) days nor more than sixty (60) days prior to the
redemption date. Such notice shall state the redemption date
and the redemption price and shall designate the serial
numbers of the Bonds to be redeemed by giving the individual
number of each Bond or by stating that all Bonds between two
stated numbers, both inclusive, have been called for
redemption, and shall require that such Bonds be surrendered
at the office of the Fiscal Agent for redemption at the
redemption price thereof, giving notice also that further
interest on such Bonds will not accrue after the redemption
date. If any Bond so chosen for redemption shall not be
redeemable in whole, such notice shall also state that such
Bond is to be redeemed in part only and that upon
presentation of such Bond for redemption there will be issued
in lieu of the unredeemed portion of principal thereof a new
Bond or Bonds of the same Series and maturity of authorized
denominations equal in aggregate principal amount to such
unredeemed portion.
The Fiscal Agent shall also cause notice of any
redemption to be mailed to the respective registered owners
of any Bonds designated for redemption at their addresses
appearing in the registration books required to be kept by
34
the Fiscal Agent pursuant to Section 3 . 03 at least thirty
(30) days but not more than sixty (60) days prior to the
redemption date, but such mailing shall not be a condition
precedent to such redemption and failure to mail or to
receive any such notice shall not affect the validity of the
proceedings for the redemption of such Bonds.
The Fiscal Agent shall publish and mail a notice of
redemption of Bonds upon receipt of a Written Request of the
City (which request shall be given to the Fiscal Agent at
least sixty (60) days prior to the date fixed for
redemption) , but only after the City shall have deposited
with or otherwise made available to the Fiscal Agent the
money required for payment of the redemption price of all
Bonds then to be called for redemption (or the Fiscal Agent
determines that money will be deposited with or otherwise
made available to it in such amount and in sufficient time
for such purpose) , together with the estimated expense of
giving such notice.
SECTION 4.04. Partial Redemption of Bonds. Upon
surrender of any Bond redeemed in part only, the City shall
execute and the Fiscal Agent shall authenticate and deliver
to the registered owner thereof at the expense of the City a
new Bond or Bonds of the same Series and maturity and of
authorized denominations equal in aggregate principal amount
to the unredeemed portion of the Bond surrendered.
3S
SECTION 4.OS . Effect of Redemption of Bonds. If
notice of redemption has been duly given as aforesaid and
money for the payment of the principal of and redemption
premiums, if any, on, together with interest to the
redemption date on, the Bonds so called for redemption is
held by the Fiscal Agent, then on the redemption date
designated in such notice such Bonds shall become due and
payable, and from and after the date so designated interest
on the Bonds so called for redemption shall cease to accrue
and the Holders of such Bonds shall have no rights in respect
thereof except to receive payment of the principal and
redemption premuiums, if any, thereof and interest accrued
thereon to the redemption date.
SECTION 4. 06. Disposition of Redeemed Bonds. All
Bonds redeemed pursuant to the provisions of this article,
shall be cancelled by the Fiscal Agent and surrendered to the
City and shall not be reissued.
ARTICLE V
NET REVENUES AND NET DISTRIBUTION INCOME
SECTION S . 01 . Receipt and Deposit of Revenues.
The City covenants and agrees that all Revenues, when and as
received, will be received and held in trust by the City
hereunder, and will be deposited as received in the Revenue
Fund, which fund is hereby created and shall be known as the
36
City of Ukiah Electric Revenue Fund and which fund the City
hereby covenants and agrees to maintain so long as any Bonds
are Outstanding hereunder, and such Revenues will be
accounted for through and held in trust in the Revenue Fund,
and the City shall only have such beneficial right or
interest in such money as provided herein. All such
Revenues, whether held by the City as trustee or deposited
with the Fiscal Agent as trustee, all as herein provided,
shall nevertheless be disbursed, allocated and applied solely
to the uses and purposes hereinafter in this article set
forth, and shall be accounted for separately and apart from
all other accounts, funds, money or other resources of the
City.
SECTION 5.02 . Pledge of Net Revenues and Net
Distribution Income. All Net Revenues and all Net
Distribution Income are hereby irrevocably pledged to the
punctual payment of the interest on and principal of and
redemption premiums, if any, on the Bonds, and the Net
Revenues and the Net Distribution Income shall not be used
for any other purpose while any of the Bonds remain
Outstanding; except that out of the Net Revenues and the Net
Distribution Income there may be apportioned such sums, for
such purposes, as are expressly permitted by Section 5 . 03 .
This pledge shall constitute a first and exclusive lien on
the Net Revenues and the Net Distribution Income for the
37
payment of the Bonds in accordance with the terms hereof and
thereof.
SECTION 5.03 . Use of Revenues and Net Distribution
Income. All Revenues in the Revenue Fund and all Net
Distribution Income shall be set aside by the City in the
treasury of the City or deposited by the City with the Fiscal
Agent in the following respective special accounts (each of
which is hereby created and each of which the City hereby
covenants and agrees to maintain or cause to be maintained) ,
in the following order of priority:
( 1) Maintenance and Operation Account (held by the
City) ,
(2 ) Interest Account (held by the Fiscal Agent) ,
(3 ) Principal Account (held by the Fiscal Agent) ,
(4) Bond Reserve Account (held by the Fiscal
Agent) , and
(5) Surplus Account (held by the City) .
All Revenues and all Net Distribution Income
in each of such accounts shall be held in trust by the
City or the Fiscal Agent and shall be applied, used and
withdrawn only for the purposes hereinafter authorized
in this section.
( 1) Maintenance and Operation Account. On the
date of issuance of the initial Series of Bonds
hereunder, the City shall, from other available funds of
the City, deposit in the Maintenance and Operation
38
Account a sum at least equal to the amount required by
the City for the payment of budgeted Maintenance and
Operation Costs of the Enterprise during the period
commencing on such date and continuing through the last
day of the current month, and thereafter, on or before
the first day of each month, the City shall, from money
in the Revenue Fund, deposit in the Maintenance and
Operation Account a sum equal to the amount required by
the City for the payment of budgeted Maintenance and
Operation Costs of the Enterprise during such month. If
no budget has yet been prepared for such month, such
deposit shall be of a sum equal to the amount expended
by the City for the payment of Maintenance and Operation
Costs of the Enterprise for the same calendar month in
the immediately preceding year. Money in the
Maintenance and Operation Account shall be used only to
pay Maintenance and Operation Costs of the Enterprise as
they become due and payable.
(2) Interest Account. On or before the first day
of each May and November, the City shall, from money in
the Revenue Fund and from the Net Distribution Income,
deposit with the Fiscal Agent in the Interest Account an
amount of money equal to the aggregate amount of
interest becoming due and payable on all Outstanding
Bonds on the next succeeding interest payment date.
39
No deposit need be made into the Interest Account
if the amount of money contained therein is at least
equal to the interest to become due on the next interest
payment date upon all Outstanding Bonds.
All money in the Interest Account shall be used and
withdrawn by the Fiscal Agent solely for the purpose of
paying the interest on the -Bonds as it shall become due
and payable (including accrued interest on any Bonds
purchased or redeemed prior to maturity) .
(3) Principal Account. On or before the first day
of each May and November, the City shall, from the money
in the Revenue Fund and from the Net Distribution
Income, deposit with the Fiscal Agent in the Principal
Account an amount of money equal to (a) one-half ( 1/2)
of the aggregate amount of principal becoming due and
payable on the Outstanding Serial Bonds on the next
succeeding June 1, plus (b) one-half (1/2 ) of the
aggregate amount of the minimum annual sinking fund
account payments required by all Supplemental
Resolutions to be made during the year ending on the
next succeeding June 1 into the respective sinking fund
accounts for all Term Bonds for which sinking fund
accounts shall have been established, all of which
sinking fund account payments shall be made without
priority of any sinking fund account payment into any
one sinking fund account over any other sinking fund
40
account payment into any other sinking fund account. In
the event that there shall be insufficient money to make
in full all such principal payments and sinking fund
account payments required to be made at any one time,
then such money shall be applied pro rata to the making
of such principal payments and such sinking fund account
payments in that proportion which such principal
payments and sinking fund account payments bear to each
other.
No deposit need to be made into the Principal
Account if the amount of money contained therein is at
least equal to the principal of all outstanding Serial
Bonds maturing by their terms on the next succeeding
June 1 plus the aggregate of all minimum annual sinking
fund account payments required to be made during the
year ending on the next succeeding June 1.
All money in the Principal Account shall be used
and withdrawn by the Fiscal Agent solely for the purpose
of paying the principal of and redemption premiums, if
any, on the Bonds as they shall become due and payable,
except that any money in any sinking fund account shall
be used and withdrawn by the Fiscal Agent only to
purchase or to redeem Term Bonds for which such sinking
fund account was created as provided in any Supplemental
Resolution.
41
(4) Bond Reserve Account. On or before the first
day of each May and November, the City shall, from money
in the Revenue Fund and from the Net Distribution
Income, deposit with the Fiscal Agent in the Bond
Reserve Account such amount of money as shall be
required to restore the Bond Reserve Account to a sum
equal to the Maximum Aggregate Annual Debt Service on
all Outstanding Bonds.
No deposit need be made into the Bond Reserve
Account if the amount of money contained therein is at
least equal to the amount of money required by this
paragraph to be on deposit therein.
If on any June 1 the amount of money in the Bond
Reserve Account exceeds the amount of money required by
the above paragraph to be on deposit therein and if the
City is not then in default hereunder, the Fiscal Agent
shall withdraw the amount of any such excess from such
account and shall pay such amount to the City for
deposit in the Surplus Account. Except for such
withdrawals, all money in the Bond Reserve Account shall
be used and withdrawn by the Fiscal Agent solely for the
purpose of replenishing the Interest Account or the
Principal Account, in such order, in the event of any
deficiency in either of such accounts, or for the
purpose of paying the interest on or principal of or
42
redemption premiums, if any, on the Bonds in the event
that no other money of the City is available therefor.
(5) Surplus Account. All money remaining in the
Revenue Fund on June 1 of each year, after withdrawing
all of the sums required to be withdrawn therefrom by
the City by the provisions of Sections 5. 03 ( 1) , (2 ) , (3 )
and (4) hereof, shall be deposited by the City in the
Surplus Account. Money in the Surplus Account shall be
used as and when needed to eliminate any deficiency
which may exist at any time in any of the accounts
established by Sections 5 . 03 (1) , (2) , (3 ) and (4) in
such order, and may be expended by the City at any time
to pay Maintenance and Operation Costs of the- Enterprise
or to pay costs of acquisition and construction of any
additions, betterments, extensions or improvements to
the Enterprise. On the May 31 following each such
June 1 deposit into the Surplus Account, any balance
remaining therein shall be withdrawn therefrom and
transferred to the City for expenditure for any lawful
purpose of the City.
ARTICLE VI
COVENANTS OF THE CITY
SECTION 6.01. Punctual Payment and Performance.
The City will punctually pay the interest on and principal of
and redemption premium, if any, to become due on every Bond
43
issued hereunder in strict conformity with the terms of the
Law and hereof and of the Bonds, and will faithfully observe
and perform all the agreements, conditions, covenants and
terms contained herein and in the Bonds required to be
observed and performed by it.
SECTION 6.02 . Against Encumbrances. The City will
not make any pledge of or place any charge or lien upon the
Enterprise or any part thereof or upon the Revenues except as
provided herein, and will not issue any bonds, notes or other
evidences of indebtedness payable from the Net Revenues and
the Net Distribution Income as provided herein or secured by
a pledge of or charge or lien upon the Net Revenues and the
Net Distribution Income except the Bonds. The City may at
any time, or from time to time, issue evidences of
indebtedness for any purpose which are payable from and
secured by a pledge of and charge and lien upon any money in
the Surplus Fund as may from time to time be deposited
therein or transferred thereto (as provided in
Section 5 . 03(5) ) , provided that such pledge, charge and lien
shall be subordinate in all respects to the pledge of and
charge and lien upon the Net Revenues and the Net
Distribution Income provided herein for the benefit of the
Bonds.
SECTION 6.03 . Against Sale or Other Disposition of
Property. The City will not sell, lease or otherwise dispose
of the Enterprise or any part thereof essential to the proper
44
operation of the Enterprise or to the maintenance of the
Revenues. The City will not enter into any agreement or
lease which impairs the operation of the Enterprise or any
part thereof necessary to secure adequate Net Revenues and
Net Distribution Income for the payment of the interest on
and principal of and redemption premiums, if any, on the
Bonds, or which would otherwise impair the rights of the
Holders with respect to the Net Revenues and the Net
Distribution Income or the operation of the Enterprise. Any
real or personal property which has become nonoperative or
which is not needed for the efficient and proper operation of
the Enterprise, or any material or equipment which has become
worn out, may be sold at not less than the market value
thereof if such sale will not reduce the Revenues and if the
net proceeds of such sale are treated as Net Revenues.
SECTION 6.04. Against Competitive Facilities. The
City will not acquire, construct, maintain or operate and
will not, within the scope of its powers, permit any other
public or private corporation, political subdivision,
district or agency or any person whomsoever to acquire,
construct, maintain or operate within the City any electric
generation and transmission system competitive with the
Enterprise.
SECTION 6. 05. Against Arbitrage. The City will
not make any use of the proceeds of the Bonds which will
cause the Bonds to be "arbitrage bonds" subject to federal
45
income taxation by reason of Section 103 (c) of the Internal
Revenue Code of 1954, and to that end the City, with respect
to the proceeds of the Bonds, will comply with all
requirements of such section and all regulations of the
United States Department of the Treasury issued thereunder to
the extent that such requirements are, at the time,
applicable and in effect.
SECTION 6.06. Acquisition and Construction of
Projects. The City will acquire and construct each Project
with all practicable dispatch and in an expeditious manner
and in conformity with law so as to complete the same as soon
as possible.
SECTION 6.07. Maintenance and Operation of the
Enterprise; Budgets. The City will maintain the Enterprise
in good condition, repair and working order at all times and
will operate the Enterprise in an efficient and economical
manner and will pay all Maintenance and Operation Costs of
the Enterprise as they become due and payable.
The City will adopt and file with the Fiscal Agent,
on or before the date of issuance of the initial Series of
Bonds hereunder, a budget approved by the Council setting
forth the estimated Maintenance and Operation Costs of the
Enterprise for the period from such date until the close of
the then current Fiscal Year. On or before the first day of
each Fiscal Year thereafter, the City will adopt and file
with the Fiscal Agent a budget approved by the Council
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setting forth the estimated Maintenance and Operation Costs
of the Enterprise for such Fiscal Year. Any budget for any
Fiscal Year adopted and approved in accordance with this
section may ( subject to such approval) be amended at any time
during such Fiscal Year.
SECTION 6.08. Payment of Claims. The City will
pay and discharge any and all lawful claims which, if unpaid,
might become a charge or lien upon the Net Revenues and the
Net Distribution Income or any part thereof or upon any funds
in the hands of the City or the Fiscal Agent prior to or on a
parity with the charge and lien upon the Net Revenues and the
Net Distribution Income securing the Bonds, or which might
impair the security of the Bonds.
SECTION 6. 09. Insurance.
(a) The City will maintain insurance on the
Enterprise with responsible insurers in such amounts and
against such risks (including accident to or destruction of
the Enterprise) as are usually covered in connection with
municipal electric generation and transmission systems
similar to the Enterprise so long as such insurance is
available on the open market from responsible insurers at
reasonable cost, and all such insurance policies shall
contain a loss payable clause making any loss thereunder
payable to the Fiscal Agent as its interests may appear. In
the event of any damage to or destruction of the Enterprise
caused by the perils covered by such insurance, the proceeds
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of such insurance shall be applied to the repair,
reconstruction or replacement of the damaged or destroyed
portion of the Enterprise; and the City shall cause such
repair, reconstruction or replacement to begin promptly after
such damage or destruction shall occur and to continue and to
be properly completed as expeditiously as possible, and the
Fiscal Agent shall pay out of the proceeds of such insurance
all costs and expenses in connection with such repair,
reconstruction or replacement so that the same shall be
completed and the Enterprise shall be free and clear of all
claims and liens. If the proceeds received by reason of any
such loss shall exceed the costs of such repair,
reconstruction or replacement, the Fiscal Agent shall
transfer such excess to the City and the City shall treat
such excess as Net Revenues. Notwithstanding the foregoing,
if the proceeds of such insurance are sufficient to enable
the City to retire all Outstanding Bonds, whether at maturity
or on redemption prior to maturity or any combination
thereof, the City may elect not to repair, reconstruct or
replace the damaged or destroyed portion of the Enterprise,
and thereupon, upon receipt of a Written Request of the City
as appropriate, the proceeds of such insurance shall be
applied by the Fiscal Agent to the payment when due of the
interest to become due on all Outstanding Bonds on and prior
to the maturity date or redemption date thereof, as the case
may be, and to the payment of the principal of and redemption
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premiums, if any, on all Outstanding Bonds at maturity or on
redemption prior to maturity, as the case may be.
(b) The City will maintain such other insurance
which it shall deem advisable or necessary to protect its
interests and the interests of the Holders, which insurance
shall afford protection in such amounts and against such
risks as are usually covered in connection with municipal
electric generation and transmission systems similar to the
Enterprise; provided that any such insurance may be
maintained under a self-insurance program so long as such
self-insurance is maintained in the amounts and manner
usually maintained in connection with municipal electric
generation and transmission systems similar to the Enterprise.
All policies of insurance required to be maintained
herein shall provide that the Fiscal Agent shall be given
thirty (30) days' written notice of any intended cancellation
thereof or reduction of coverage provided thereby. The
Fiscal Agent shall not be responsible for the sufficiency of
any insurance required herein and shall be fully protected in
accepting payment on account of such insurance for any
adjustment, compromise or settlement of any loss agreed to by
it.
SECTION 6. 10. Accounting Records; Financial
Statements and Other Reports.
(a) The City will keep appropriate accounting
records in which complete and correct entries shall be made
49
of all transactions relating to the Enterprise, which
accounting records shall at all times during business hours
be subject to the inspection of the Fiscal Agent or of any
Holder (or his representative authorized in writing) .
(b) The City will prepare and file with the Fiscal
Agent annually within one hundred twenty ( 120) days after the
close of each Fiscal Year (commencing with the Fiscal Year
ending June 30, 1984) --
( 1) financial statements of the City for the
preceding Fiscal Year prepared in accordance with
Generally Accepted Accounting Principles, together with
an Accountant' s Report thereon and a special report
prepared by the Independent Certified Public Accountant
who examined such financial statements stating that
nothing came to his attention in connection with such
examination that caused him to believe that the City was
not in compliance with any of the financial agreements
or covenants contained herein; and
(2 ) a detailed report containing a statement
of the physical condition of the Enterprise and a
statement that the City is not in default hereunder and
a statement listing all insurance policies maintained
and self-insurance programs maintained by the City with
respect to the Enterprise as of the close of such Fiscal
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Year, including the names of the insurers which have
issued the policies and the amounts thereof and the
property or risks covered thereby.
(c) The City will prepare annually not more than
one hundred twenty ( 120) days after the close of each Fiscal
Year (commencing with the Fiscal Year ending June 30, 1984) a
summary report showing in reasonable detail the Revenues and
the Maintenance and Operation Costs of the Enterprise and the
Net Distribution Income for the preceding Fiscal Year and
containing a general statement of the physical condition of
the Enterprise. The City will furnish a copy of such summary
report to any Holder upon request and will furnish to the
Fiscal Agent such reasonable number of copies thereof as may
be required by the Fiscal Agent for distribution (at the
expense of the City) to investment bankers, security dealers
and others interested in the Bonds requesting copies thereof.
SECTION 6. 11 . Protection of Security and Rights of
Holders. The City will preserve and protect the security of
the Bonds and the rights of the Holders and will warrant and
defend their rights against all claims and demands of all
persons.
SECTION 6. 12 . Payment of Governmental Charges and
Compliance with Governmental Regulations. The City will pay
and discharge all taxes or payments in lieu of taxes,
assessments and other governmental charges or liens that may
be levied, assessed or charged upon the Enterprise or any
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part thereof or upon the Revenues or any part thereof or upon
the Net Distribution Income or any part thereof promptly as
and when the same shall become due and payable, except that
the City shall not be required to pay any such governmental
charges so long as the application or validity thereof shall
be contested in good faith and the City shall have set aside
reserves to cover such charges. The City will duly observe
and conform with all valid regulations and requirements of
any governmental authority relative to the operation of the
Enterprise or any part thereof, except that the City shall
not be required to comply with any such regulations or
requirements so long as the application or validity thereof
shall be contested in good faith.
SECTION 6. 13 . Amount of Rates, Fees and Charges.
The City will fix, prescribe and collect rates, fees and
charges for the electric generation and transmission service
provided or made available by the Enterprise and for the
electric distribution service provided or made available by
the City' s electric distribution system which are fair and
nondiscriminatory and which will be sufficient to yield Net
Revenues and Net Distribution Income during each Fiscal Year
equal to at least one hundred twenty-five per cent ( 12S%) of
the Debt Service for such Fiscal Year. The City may make
adjustments from time to time in such rates, fees and charges
and may make such classification thereof as it deems
necessary, but shall not reduce the rates, fees and charges
S2
then in effect unless the Net Revenues and the Net
Distribution Income from such reduced rates, fees and charges
will at all times be sufficient to meet the requirements of
this section.
SECTION 6. 14. Collection of Rates, Fees and
Charges. The City will have in effect at all times rules and
regulations requiring each consumer or customer located on
any premises connected with the Enterprise to pay the rates,
fees and charges applicable to the electric generation and
transmission service provided or made available by the
Enterprise to such premises and providing for the biling
thereof and for a due date and a delinquency date for each
bill . In each case where such bill remains unpaid in whole
or in part after it becomes delinquent, the City may
disconnect such premises from the Enterprise, and such
premises shall not thereafter be reconnected to the
Enterprise until all delinquent bills and penalties (if any)
have been paid or provision satisfactory to the City for such
payment shall have been made, together with the charges for
reconnection to the Enterprise. The City 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
corporation, or by any public agency (including the United
States of America, the State of California and any public
corporation, political subdivision, city, county, district or
agency of any thereof) .
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SECTION 6. 15 . Eminent Domain Proceeds. If all or
any part of the Enterprise shall be taken by eminent domain
proceedings, the net proceeds realized by the City thereby
shall be deposited by the City with the Fiscal Agent in a
special fund in trust, and shall be applied as follows --
(a) If ( 1) the City obtains and files with the
Fiscal Agent an Engineer' s Report showing (i ) the estimated
loss of annual Net Revenues, if any, suffered or to be
suffered by the City by reason of such eminent domain
proceedings, (ii ) a general description of the additions,
betterments, extensions or improvements to the Enterprise
proposed to be acquired and constructed by the City from such
proceeds, and (iii ) an estimate of the additional annual Net
Revenues to be derived from such additions, betterments,
extensions or improvements, and (2) the Fiscal Agent, on the
basis of such Engineer' s Report, determines that the
estimated additional annual Net Revenues will sufficiently
offset the estimated loss of annual Net Revenues resulting
from such eminent domain proceedings so that the ability of
the City to meet its obligations hereunder will not be
substantially impaired (which determination shall be final
and conclusive) , then the City shall promptly proceed with
the acquisition and construction of such additions,
betterments, extensions or improvements substantially in
accordance with such Engineer' s Report and such proceeds
shall be applied by the Fiscal Agent for the payment of the
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costs of such acquisition and construction, and any balance
of such proceeds not required by the City for such purpose
shall be transferred to the City and the City shall treat
such balance as Net Revenues.
(b) If the foregoing conditions are not met, then
such proceeds shall be applied by the Fiscal Agent for the
redemption or purchase of Bonds, and if the Fiscal Agent is
unable to purchase or redeem Bonds in an amount sufficient to
exhaust the available money, such money shall be held in
trust by the Fiscal Agent and applied to the payment when due
of the interest to become due on all Outstanding Bonds on and
prior to the maturity date or redemption date thereof, as the
case may be, and to the payment of the principal of and
redemption premiums, if any, on all Outstanding Bonds at
maturity or on redemption prior to maturity, as the case may
be, and pending such application such remaining money may be
invested by the Fiscal Agent in the manner provided in
Section 11. 05 for the investment of money in the Bond Reserve
Account.
(c) If such eminent domain proceedings will have
no effect, or at most a relatively immaterial effect, upon
the Net Revenues and the security of the Bonds, and if the
City obtains and files with the Fiscal Agent an Engineer' s
Report to such effect, then the Fiscal Agent shall transfer
such proceeds to the City and the City shall treat such
proceeds as Net Revenues.
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SECTION 6. 16. Further Assurances. The City will
adopt, deliver, execute and make any and all further
assurances, instruments and resolutions as may be reasonably
necessary or proper to carry out the intention or to
facilitate the performance hereof and for the better assuring
and confirming unto the Holders of the rights and benefits
provided herein.
ARTICLE VII
THE FISCAL AGENT
SECTION 7 .01. The Fiscal Agent. Bank of America,
National Trust and Savings Association, at its principal
office in San Francisco, California is hereby appointed
Fiscal Agent of the City for the purpose of receiving all
money which the City is required to deposit with the Fiscal
Agent hereunder and for the purpose of allocating, applying
and using such money as provided herein and for the purpose
of paying the interest on and principal of and redemption
premiums, if any, on all the Bonds. The City agrees that it
will at all times maintain a Fiscal Agent having a principal
office in San Francisco, California.
The City may at any time in its sole discretion
remove the Fiscal Agent initially appointed and any successor
thereto and may appoint a successor or successors thereto by
an instrument in writing; provided that any such successor
56
shall be a bank or trust company doing business and having a
principal office in San Francisco, California, having a
combined capital (exclusive of borrowed capital) and surplus
of at least five hundred million dollars ($S00, 000, 000) and
subject to supervision or examination by federal or state
authority. If such bank or trust company publishes a report
of condition at least annually, pursuant to law or to the
requirements of any supervising or examining authority above
referred to, then for the purpose of this section the
combined capital and surplus of such bank or trust company
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
The Fiscal Agent may at any time resign by giving written
notice of such resignation to the City and by giving notice
by publication of such resignation to the Holders, which
notice shall be published once a week for two (2 ) successive
weeks in a Financial Newspaper. Upon receiving such notice
of resignation, the City shall promptly appoint a successor
Fiscal Agent by an instrument in writing. Any resignation or
removal of a Fiscal Agent and appointment of a successor
Fiscal Agent shall become effective only upon the acceptance
of appointment by the successor Fiscal Agent. If, within
thirty (30) days after notice of the removal or resignation
of the Fiscal Agent no successor Fiscal Agent shall have been
appointed and shall have accepted such appointment, the
removed or resigning Fiscal Agent may petition any court of
57
competent jurisdiction for the appointment of a successor
Fiscal Agent, which court may thereupon, after such notice,
if any, as it may deem proper and prescribe and as may be
required by law, appoint a successor Fiscal Agent having the
qualifications required hereby.
The Fiscal Agent is hereby authorized to pay
interest on the Bonds due on or before the maturity or prior
redemption thereof to the Holders as their names appear in
the registration books required to be kept by the Fiscal
Agent pursuant to Section 3 . 03 as the registered owners
thereof, such interest to be paid by check mailed to the
Holders at their addresses appearing in such books or at such
other addresses as they may have filed with the Fiscal Agent
for that purpose, and to pay to the Holders or their legal
assignees the principal of and redemption premiums, if any,
on the Bonds upon presentation and surrender of the Bonds to
the Fiscal Agent at maturity or on redemption prior to
maturity. The Fiscal Agent shall cancel all Bonds upon
payment thereof or upon the surrender thereof by the City and
shall return them so cancelled to the City. The Fiscal Agent
shall keep accurate records of all Bonds paid and discharged
and cancelled by it.
The City shall from time to time, subject to any
agreement between the City and the Fiscal Agent then in
force, pay the Fiscal Agent compensation for its services,
reimburse the Fiscal Agent for all its advances and
58
expenditures, including but not limited to advances to and
fees and expenses of independent accountants, counsel and
engineers or other experts employed by it in the exercise and
performance of its rights and obligations hereunder, and
indemnify and save the Fiscal Agent harmless against
liabilities not arising from its own negligence or willful
misconduct which it may incur in the exercise and performance
of its rights and obligations hereunder.
SECTION 7. 02 . Liability of the Fiscal Agent. The
recitals of facts, agreements and covenants contained herein
and in the Bonds shall be taken as statements, agreements and
covenants of the City, and the Fiscal Agent does not assume
any responsibility for the correctness of the same and does
not make any representation as to the sufficiency or validity
hereof or of the Bonds, and shall not incur any
responsibility in respect thereof other than in connection
with the rights and obligations assigned to or imposed upon
it herein or in the Bonds, and shall not be liable in
connection with the performance of its duties hereunder
except for its own negligence or willful misconduct.
SECTION 7.03 . Notice to the Fiscal Agent. The
Fiscal Agent shall be protected in acting upon any Bond,
certificate, consent, notice, opinion, report, request,
resolution or other document or paper believed by it to be
genuine and to have been signed or presented by the proper
party or parties. The Fiscal Agent may consult with counsel,
59
who may be counsel to the City, with regard to legal
questions, and the opinion of such counsel shall be full and
complete authorization and protection with respect to any
action taken or suffered hereunder in good faith and in
accordance therewith.
The Fiscal Agent shall not be bound to recognize
any person as the Holder of a Bond unless and until such Bond
is submitted for inspection, if required, and his title
thereto satisfactorily established, if disputed.
Whenever in the administration of its rights and
obligations hereunder the Fiscal Agent shall deem it
necessary or desirable that a matter be established or proved
prior to taking or suffering any action hereunder, such
matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of bad faith on
the part of the Fiscal Agent, be deemed to be conclusively
established or proved by a Certificate of the City, which
shall be full warrant to the Fiscal Agent for any action
taken or suffered under the provisions hereof upon the faith
thereof, but in its discretion the Fiscal Agent may, in lieu
thereof, accept other evidence of such matter or may require
such additional evidence as it may deem reasonable.
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ARTICLE VIII
AMENDMENT OF OR SUPPLEMENT TO
THE RESOLUTION
SECTION 8. 01. Amendment or Supplement by Consent
of Holders. The Resolution and the rights and obligations of
the City and of the Holders may be amended or supplemented at
any time by a Supplemental Resolution which shall become
binding when the written consents of the Holders of sixty
per cent (60%) in aggregate principal amount of the Bonds
then Outstanding, exclusive of Bonds disqualified as provided
in Section 8. 02, are filed with the Fiscal Agent. No such
amendment or supplement shall ( 1) extend the maturity of or
reduce the interest rate on or otherwise alter or impair the
obligation of the City to pay the interest on or principal of
or redemption premium, if any, on any Bond at the time and
place and at the rate and in the currency provided herein
without the express written consent of the Holder of such
Bond, or (2) permit the creation by the City of any pledge of
or charge or lien upon the Net Revenues and the Net
Distribution Income superior to or on a parity with the
pledge, charge and lien created hereby for the benefit of the
Bonds, or (3 ) reduce the percentage of Bonds required for the
written consent to any such amendment or supplement, or
(4) modify any rights or obligations of the Fiscal Agent
without its prior written assent thereto.
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The Resolution and the rights and obligations of
the City and of the Holders may also be amended or
supplemented at any time by a Supplemental Resolution which
shall become binding upon adoption without the prior written
consent of any Holders, but only to the extent permitted by
law and only for any one or more of the following purposes --
(a) To add to the agreements and covenants
required herein to be performed by the City other agreements
and covenants thereafter to be performed by the City which
shall not adversely affect the interests of the Holders, or
to surrender any right or power reserved herein to or
conferred upon the City which shall not adversely affect the
interests of the Holders;
(b) To make such provisions for the purpose of
curing any ambiguity or of curing, correcting or
supplementing any defective provision contained herein or in
regard to questions arising hereunder which the City may deem
desirable or necessary and not inconsistent herewith and
which shall not adversely affect the interests of the
Holders; or
(c) To authorize the issuance of a Series of Bonds
and to provide the terms and conditions under which such
Series of Bonds may be issued, subject to the conditions and
upon compliance with the procedure set forth in Article II .
SECTION 8. 02 . Disqualified Bonds. Bonds owned or
held by or for the account of the City shall not be deemed
62
Outstanding for the purpose of any consent or other action or
any calculation of Outstanding Bonds provided for in this
article, and shall not be entitled to consent to or take any
other action in this article provided for.
SECTION 8.03 . Endorsement or Replacement of Bonds
After Amendment or Supplement. After the effective date of
any action taken as hereinabove provided, the City may
determine that the Bonds may bear a notation by endorsement
in form approved by the City as to such action, and in that
case upon demand of the Holder of any Bond Outstanding on
such effective date and presentation of his Bond for such
purpose at the office of the Fiscal Agent a suitable notation
as to such action shall be made on such Bond. If the City
shall so determine, new Bonds so modified as, in the opinion
of the City, shall be necessary to conform to such action
shall be prepared and executed, and in that case upon demand
of the Holder of any Bond Outstanding on such effective date
such new Bonds shall be exchanged at the office of the Fiscal
Agent, without cost to each Holder, for Bonds then
Outstanding upon surrender of such Outstanding Bonds.
SECTION 8.04. Amendment or Supplement by Mutual
Consent. The provisions of this article shall not prevent
any Holder from accepting any amendment or supplement as to
any particular Bonds held by him, provided that due notation
thereof is made on such Bonds.
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ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES OF HOLDERS
SECTION 9 . 01. Events of Default and Acceleration
of Maturities. If one or more of the following Events of
Default shall happen, that is to say --
(a) if default shall be made in the due and punctual
payment of the interest on any Bond when and as the same
shall become due and payable, and such default shall have
continued for a period of thirty (30) days;
(b) if default shall be made in the due and punctual
payment of the principal of or redemption premium, if any, on
any Bond when and as the same shall become due and payable,
whether at maturity or by proceedings for redemption, and
such default shall have continued for a period of thirty (30)
days;
(c) if default shall be made by the City in the
performance of any of the agreements or covenants required
hereby to be performed by it, and such default shall have
continued for a period of sixty (60) days after the City
shall have been given notice in writing of such default by
the Fiscal Agent; or
(d) if the City shall file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy
laws or any other applicable law of the United States of
America or any state therein, or if a court of competent
64
jurisdiction shall approve a petition filed with or without
the consent of the City seeking reorganization or arrangment
under the federal bankruptcy laws or any other applicable law
of the United States of America or any state therein, or if,
under 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 City or of the whole or any
substantial part of its property;
then and in each and every such case during the continuance
of such Event of Default the Fiscal Agent may, and upon the
written request of the Holders of not less than twenty-five
per cent (25%) in aggregate principal amount of the Bonds
then Outstanding shall, by notice in writing to the City,
declare the principal of all Bonds then Outstanding and the
interest accrued thereon to be due and payable immediately,
and upon any such declaration the same shall become due and
payable, anything contained herein or in the Bonds to the
contrary notwithstanding.
This provision, however, is subject to the
condition that if at any time after the principal of all
Bonds then Outstanding shall have been so declared due and
payable and before any judgment or decree for the payment of
the money due shall have been obtained or entered the City
shall deposit with the Fiscal Agent a sum sufficient to pay
all matured interest on all the Bonds and the principal of
the Bonds matured prior to such declaration, with interest at
65
the rate borne by such Bonds on such overdue interest and
principal, and the reasonable expenses of the Fiscal Agent,
and any and all other defaults known to the Fiscal Agent
(other than in the payment of interest on and principal of
the Bonds due and payable solely by reason of such
declaration) shall have been made good or cured to the
satisfaction of the Fiscal Agent or provision deemed by the
Fiscal Agent to be adequate shall have been made therefor,
then and in every such case the Fiscal Agent may, and upon
the written request of the Holders of not less than
twenty-five per cent (25%) in aggregate principal amount of
the Bonds then Outstanding shall, by written notice to the
City, rescind and annul such declaration and its
consequences; provided that no such rescission and annulment
shall extend to or shall affect any subsequent Event of
Default or shall impair or exhaust any right or power
consequent thereon.
SECTION 9.02 . Application of Money Upon
Acceleration. All money in the accounts and funds provided
in Sections 5 .02 and 5.03 upon the date of the declaration of
acceleration by the Fiscal Agent as provided in Section 9 . 01
and all Revenues and Net Distribution Income thereafter
received by the City hereunder shall be transmitted to the
Fiscal Agent and shall be applied by the Fiscal Agent in the
following order --
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First, to the payment of the costs and expenses of
the Holders in providing for the declaration of such Event of
Default, including reasonable compensation to their
accountants, counsel and engineers, and to the payment of the
costs and expenses of the Fiscal Agent, if any, in carrying
out the provisions of this article, including reasonable
compensation to its accountants, counsel and engineers;
Second, to the payment of the Maintenance and
Operation Costs of the Enterprise; and
Third, upon presentation of the several Bonds and
coupons, and the stamping thereon of the amount of the
payment if only partially paid or upon the surrender thereof
if fully paid, to the payment of the whole amount then owing
and unpaid upon the Bonds for interest and principal, with
interest on the overdue interest and principal at the rate
borne by such Bonds, 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 interest,
principal and interest on overdue interest and principal
without preference or priority among such interest, principal
and interest on overdue interest and principal ratably to the
aggregate of such interest, principal and interest on overdue
interest and principal .
SECTION 9 .03 . Other Remedies of Holders. Any
Holder shall have the right for the equal benefit and
protection of all Holders similarly situated --
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(a) by mandamus or other suit or proceeding at law or
in equity to enforce his rights against the Council or the
City or any of the councilmembers, officers or employees of
the Council or the City, and to compel the Council or the
City or any such councilmembers, officers or employees to
perform and carry out their duties under the Law and the
agreements and covenants with the Holders contained herein;
(b) by suit in equity to enjoin any acts or things
which are unlawful or violate the rights of the Holders; or
(c) by suit in equity upon the happening of an Event of
Default to require the Council or the City or its
councilmembers, officers and employees to account as the
trustee of an express trust.
SECTION 9.04. Non-waiver. Nothing in this article
or in any other provision herein or in the Bonds shall affect
or impair the obligation of the City, which is absolute and
unconditional, to pay the interest on and principal of and
redemption premiums, if any, on the Bonds to the respective
Holders of the Bonds at the respective dates of maturity or
upon redemption prior to maturity as provided herein from the
Net Revenues and the Net Distribution Income pledged for such
payment, or shall affect or impair the right of such Holders,
which is also absolute and unconditional, to institute suit
to enforce such payment by virtue of the contract embodied
herein and in the Bonds.
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A waiver of any default or breach of duty or
contract by any Holder shall not affect any subsequent
default or breach of duty or contract or shall impair any
rights or remedies on any such subsequent default or breach
of duty or contract. No delay or omission by any Holder to
exercise any right or remedy accruing upon any default or
breach of duty or contract shall impair any such right or
remedy or shall be construed to be a waiver of any such
default or breach of duty or contract or an acquiescence
therein, and every right and remedy conferred upon the
Holders by the Law or hereby may be enforced and exercised
from time to time and as often as shall be deemed expedient
by the Holders.
If any action, proceeding or suit to enforce any
right or exercise any remedy is abandoned or determined
adversely to any Holder, the City and such Holder shall be
restored to their former positions, rights and remedies as if
such action, proceeding or suit had not been brought or taken.
SECTION 9. 05. Actions by Fiscal Agent as
Attorney-in-Fact. Any action, proceeding or suit which any
Holder shall have the right to bring to enforce any right or
remedy hereunder may be brought by the Fiscal Agent for the
equal benefit and protection of all Holders, and the Fiscal
Agent is hereby appointed (and the successive Holders, by
taking and holding the Bonds issued hereunder, shall be
conclusively deemed so to have appointed it) the true and
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lawful attorney-in-fact of the Holders for the purpose of
bringing any such action, proceeding or suit and for the
purpose of doing and performing any and all acts and things
for and on behalf of the Holders as a class or classes as may
be advisable or necessary in the opinion of the Fiscal Agent
as such attorney-in-fact.
SECTION 9.06. Remedies Not Exclusive. No remedy
herein conferred upon or reserved to the Holders is intended
to be exclusive of any other remedy, and every such remedy
shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or
in equity or by statute or otherwise, and may be exercised
without exhausting and without regard to any other remedy
conferred by the Law or any other law.
ARTICLE X
DEFEASANCE
SECTION 10. 01. Discharge of Bonds.
(a) If the City shall pay or cause to be paid or
there shall otherwise be paid to the Holders of all
Outstanding Bonds the interest thereon and the principal
thereof and the redemption premiums, if ariy, thereon at the
times and in the manner stipulated therein and herein, then
the Holders of such Bonds shall cease to be entitled to the
pledge of and charge and lien upon the Net Revenues and the
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Net Distribution Income as provided herein, and all
agreements, covenants and other obligations of the City to
the Holders of such Bonds hereunder shall thereupon cease,
terminate and become void and be discharged and satisfied.
In such event, the Fiscal Agent shall execute and deliver to
the City all such instruments as may be necessary or
desirable to evidence such discharge and satisfaction, and
the Fiscal Agent shall pay over or deliver to the City all
money or securities held by it pursuant hereto which are not
required for the payment of the interest on and principal of
and redemption premiums, if any, on such Bonds.
(b) Any Outstanding Bonds shall on the maturity
date or redemption date thereof be deemed to have been paid
within the meaning of and with the effect expressed in
subsection (a) of this section if there shall be on deposit
with the Fiscal Agent money which is sufficient to pay the
interest due on such Bonds on such date and the principal and
redemption premiums, if any, due on such Bonds on such date.
(c) Any Outstanding Bonds shall prior to the
maturity date or redemption date thereof be deemed to have
been paid within the meaning and with the effect expressed in
subsection (a) of this section if ( 1) in case any of such
Bonds are to be redeemed on any date prior to their maturity
date, the City shall have given to the Fiscal Agent in form
satisfactory to it irrevocable instructions to publish notice
of redemption of such Bonds on such date, (2 ) there shall
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have been deposited with the Fiscal Agent either money in an
amount which shall be sufficient or Federal Securities which
are not subject to redemption except by the holder thereof
prior to maturity (including any Federal Securities issued or
held in book-entry form on the books of the Department of the
Treasury of the United States of America) the interest on and
principal of which when paid will provide money which,
together with the money, if any, deposited with the Fiscal
Agent at the same time, shall be sufficient to pay when due
the interest to become due on such Bonds on and prior to the
maturity date or redemption date thereof, as the case may be,
and the principal and redemption premiums, if any, on such
Bonds, and (3 ) in the event such Bonds are not by their terms
subject to redemption within the next succeeding sixty (60)
days, the City shall have given the Fiscal Agent in form
satisfactory to it irrevocable instructions to publish, as
soon as practicable, once a week for two (2) successive weeks
in a Financial Newspaper a notice to the Holders of such
Bonds that the deposit required by clause (2 ) above has been
made with the Fiscal Agent and that such Bonds are deemed to
have been paid in accordance with this section and stating
the maturity date or redemption date upon which money is to
be available for the payment of the principal of and
redemption premiums, if any, on such Bonds.
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SECTION 10.02 . Unclaimed Money. Anything
contained herein to the contrary notwithstanding, any money
held by the Fiscal Agent in trust for the payment and
discharge of any of the Bonds or any interest thereon which
remains unclaimed for six (6) years after the date when such
Bonds or interest thereon have become due and payable, either
at their stated maturity dates or by call for redemption
prior to maturity, if such money was held by the Fiscal Agent
on such date, or for six (6) years after the date of deposit
of such money if deposited with the Fiscal Agent after the
date when such Bonds or interest thereon became due and
payable, shall, at the Written Request of the City, be repaid
by the Fiscal Agent to the City as its absolute property free
from trust, and the Fiscal Agent shall thereupon be released
and discharged with respect thereto and the Holders shall
look only to the City for the payment of such Bonds and
interest thereon; provided, however, that before being
required to make any such payment to the City the Fiscal
Agent shall, at the expense of the City, cause to be
published once a week for two (2) successive weeks in a
Financial Newspaper a notice that such money remains
unclaimed and that after a date named in such notice, which
date shall not be less than thirty (30) days after the date
of the first publication of such notice, the balance of such
money then unclaimed will be returned to the City.
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ARTICLE XI
MISCELLANEOUS
SECTION 11 .01. Liability of City Limited to Net
Revenues and Net Distribution Income. Notwithstanding
anything contained herein, the City shall not be required to
advance any money derived from any source of income other
than the Net Revenues and the Net Distribution Income as
provided herein for the payment of the interest on or
principal of or redemption premiums, if any, on the Bonds or
for the performance of any agreements or covenants contained
herein. The City may, however, advance funds for any such
purpose so long as such funds are derived from a source
legally available for such purpose and may be used by the
City for such purpose.
The Bonds are special obligations of the City and
are payable, as to interest thereon, principal thereof and
any premiums upon the redemption of any thereof, solely from
the Net Revenues and the Net Distribution Income as provided
herein, and the City is not obligated to pay them except from
the Net Revenues and the Net Distribution Income. All the
Bonds are equally secured by a pledge of and charge and lien
upon the Net Revenues and the Net Distribution Income, and
the Net Revenues and the Net Distribution Income constitute a
trust fund for the security and payment of the interest on
and principal of and redemption premiums, if any, on the
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Bonds as provided herein. The Bonds do not constitute an
indebtedness of the City within the meaning of any
constitutional or statutory limitation or restriction, and
neither the Council nor the City nor any councilmember,
officer or employee thereof shall be liable for the payment
of the interest on or principal of or redemption premiums, if
any, on the Bonds otherwise than from the Net Revenues and
the Net Distribution Income as provided herein.
SECTION 11 .02 . Benefits of the Resolution Limited
to Parties. Nothing contained herein, expressed or implied,
is intended to give to any person other than the Council, the
City, the Fiscal Agent and the Holders any right, remedy or
claim under or by reason hereof. Any agreement or covenant
required herein to be performed by or on behalf of the
Council or the City or any councilmember, officer or employee
thereof shall be for the sole and exclusive benefit of the
Fiscal Agent and the Holders.
SECTION 11 .03 . Successor is Deemed Included in All
References to Predecessor. Whenever herein either the
Council or the City or any councilmember, officer or employee
thereof is named or referred to, such reference shall be
deemed to include the successor to the powers, duties and
functions with respect to the administration, control and
management of the affairs of the City that are presently
vested in the Council or the City or such councilmember,
officer or employee, and all agreements and covenants
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required herein to be performed by or on behalf of the
Council or the City or any councilmember, officer or employee
thereof shall bind and inure to the benefit of the respective
successors thereof whether so expressed or not.
SECTION 11 . 04. Execution of Documents by Holders.
Any declaration, request or other instrument which is
permitted or required herein to be executed by Holders may be
in one or more instruments of similar tenor, and shall be
executed by Holders in person or by their attorneys duly
authorized in writing. The fact and date of the execution by
any Holder or his attorney of any declaration, request or
other instrument or of any writing appointing such attorney
may be proved by the certificate of any notary public or
other officer authorized to take acknowledgments of deeds to
be recorded in the state or territory in which he purports to
act that the person signing such declaration, request or
other instrument or writing acknowledged to him the execution
thereof, or by an affidavit of a witness to such execution
duly sworn to before such notary public or other officer.
The ownership of Bonds and the amount, maturity, number and
date of holding the same shall be proved by the registration
books required to be kept by the Fiscal Agent pursuant to
Section 3 . 03 .
Any declaration, request or other instrument or
writing of the Holder of any Bond shall bind all future
Holders of such Bond with respect to anything done or
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suffered to be done by the City in good faith and in
accordance therewith.
SECTION 11 .05. Deposit and Investment of Money in
Accounts and Funds. All money held by the City or the Fiscal
Agent in any accounts and funds established herein shall be
held in time or demand deposits (including certificates of
deposit) or repurchase agreements of banks (including the
Fiscal Agent) authorized to accept deposits of public funds,
and shall be secured at all times by such obligations as are
required by law and to the fullest extent required by law,
except such money that is at the time invested in accordance
with this section. Money in the Interest Account and in the
Principal Account and in the Bond Reserve Account may, and at
the direction of the City, shall be invested by the Fiscal
Agent in Federal Securities (or repurchase agreements of
Federal Securities) maturing not later than the date on which
it is estimated that such money will be required to be paid
out hereunder, but not more than five (5) years from the date
of purchase by the Fiscal Agent. Money in the Revenue Fund
and money in any Project account in the Acquisition and
Construction Fund may, and at the direction of the Council,
shall be invested by the Treasurer of the City in any lawful
investment of the City (with the exception of any direct or
general obligations of any state or local agency within the
United States of America, or any repurchase agreements of
such securities, that is rated lower than the two highest
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rating categories by a nationally recognized bond rating
agency) maturing not later than the date on which it is
estimated that such money will be required to be paid out
hereunder. All money invested by the Fiscal Agent shall be
invested so as to obtain the highest yield which the Fiscal
Agent deems practicable, having due regard for the safety of
such money, and the Fiscal Agent may act as principal or
agent in the acquisition or disposition of any such
investment. The Fiscal Agent shall not be liable or
responsible for any loss suffered in connection with any such
investment made by it under the terms of and in accordance
with this section. The Fiscal Agent may sell or present for
redemption any obligations so purchased whenever it shall be
necessary in order to provide money to meet any payment of
the money so investeed, and the Fiscal Agent shall not be
liable or responsible for any losses resulting from any such
investment sold or presented for redemption. All interest
received on any money so deposited or invested which exceeds
the requirements of the account or fund from which such money
was deposited or invested shall be deposited in or
transferred to the Revenue Fund, except that all interest
received on any money so deposited or invested in any Project
account in the Acquisition and Construction Fund shall be
deposited in or transferred to such Project account.
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SECTION 11 .06. Waiver of Personal Liability. No
councilmember, officer or employee of the Council or the City
shall be individually or personally liable for the payment of
the interest on or principal of or redemption premiums, if
any, on the Bonds, but nothing herein contained shall relieve
any councilmember, officer or employee of the Council or the
City from the performance of any official duty provided by
the Law or any other applicable provisions of law or hereby.
SECTION 11.07. Acquisition of Bonds by City. All
Bonds acquired by the City, whether by purchase or gift or
otherwise, shall be surrendered to the Fiscal Agent for
cancellation.
SECTION 11.08. Content of Certificates and
Reports. Every certificate or report with respect to
compliance with an agreement, condition, covenant or term
provided herein shall include (a) a statement that the person
or persons making or giving such certificate or report have
read such agreement, condition, covenant or term and the
definitions herein relating thereto; (b) a brief statement as
to the nature and scope of the examination or investigation
upon which the opinion contained in such certificate or
report is based; (c) a statement that, in the opinion of the
signers, they have made or caused to be made such examination
or investigation as is necessary to enable them to express an
informed opinion as to whether or not such agreement,
condition, covenant or term has been complied with; and (d) a
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statement as to whether, in the opinion of the signers, such
agreement, condition, covenant or term has been complied with.
Any such certificate made or given by an officer of
the City may be based, insofar as it relates to legal
matters, upon a representation made or given by counsel
unless such officer knows that the representation with
respect to the matters upon which his certificate may be
based, as aforesaid, is erroneous, or in the exercise of
reasonable care should have known that the same was
erroneous. Any such representation made or given by counsel
may be based, insofar as it relates to factual matters
information with respect to which is in the possession of the
City, upon a representation by an officer or officers of the
City unless such counsel knows that the representation with
respect to the matters upon which his representation may be
based, as aforesaid, is erroneous, or in the exercise of
reasonable care should have known that the same was erroneous.
SECTION 11. 09 . Publication for Successive Weeks.
Any publication required to be made hereunder for successive
weeks in a Financial Newspaper may be made in each instance
upon any business day of the first week and need not be made
on the same business day of any succeeding week or in the
same Financial Newspaper for any subsequent publication, but
may be made on different business days or in different
Financial Newspapers, as the case may be.
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SECTION 11 . 10. Accounts and Funds. Any account or
fund required herein to be created and maintained by the City
or the Fiscal Agent may be created and maintained in the
accounting records of the City or the Fiscal Agent either as
an account or a fund, and may, for the purposes of such
accounting records, any audits thereof and any financial
reports or statements with respect thereto, be treated either
as an account or as a fund; but all such accounting records
with respect to all such accounts and funds shall at all
times be maintained in accordance with Generally Accepted
Accounting Principles and with due regard for the protection
of the security of the Bonds and the rights of the Holders.
SECTION 11 . 11 . Article and Section Headings and
References. The headings or titles of the several articles
and sections hereof and the table of contents appended hereto
shall be solely for convenience of reference and shall not
affect the construction, effect or meaning hereof, and words
of any gender shall be deemed and construed to include all
genders. All references herein to "Articles, " "Sections" and
other subdivisions are to the corresponding articles,
sections or subdivisions of the Resolution; and the words
"hereby, " "herein, " "hereof, " "hereto, " "herewith" and
"hereunder" and other words of similar import refer to the
Resolution as a whole and not to any particular article,
section or subdivision hereof.
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SECTION 11 . 12 . Partial Invalidity. If any one or
more of the agreements or covenants or portions thereof
required hereby to be observed or performed by the City or
the Fiscal Agent shall be contrary to law, then such
agreement or agreements, such covenant or covenants or such
portions thereof shall be null and void and shall be deemed
separable from the remaining agreements or covenants or
portions thereof and shall in no way affect the validity
hereof or of the Bonds; and the Holders shall retain all the
rights and benefits accorded to them under the Law or any
other applicable provisions of law. The City hereby declares
that it would have adopted the Resolution and each and every
other article, 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 of the articles, sections,
paragraphs, subdivisions, sentences, clauses or phrases
hereof or the application thereof to any person or
circumstance may be held to be unconstitutional,
unenforceable or invalid.
SECTION 11. 13 . Repeal of Inconsistent
Resolutions. Any resolution of the City and any part of any
resolution inconsistent herewith is hereby repealed to the
extent of such inconsistency.
SECTION 11. 14. Effective Date of the Resolution.
The Resolution shall take effect from and after its passage
and approval .
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PASSED AND ADOPTED on August 17, 1983 by the
following vote:
AYES: Counci lmembers Dickens, Hickey, Myers, Kelley
NOES: None
ABSENT: Counci lmember Fei busch
Approved:
Mayor of the
City of Ukiah, California
[ SEAL]
ATTEST:
City Clerk f the ,�--
City of Ukiah, California
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CITY CLERK' S CERTIFICATE
I , Hattie M. Tillotson, City Clerk of the City of
Ukiah, California, hereby certify as follows:
The foregoing is a full, true and correct copy of a
resolution duly adopted at a regular meeting of the City
Council of the City of Ukiah, California duly and regularly
and legally held at the regular meeting place thereof on
August 17, 1983 , of which meeting all the members of said
City Council had due notice and at which a majority thereof
was present.
At said meeting said resolution was adopted by the
following vote:
Ayes: Counci lmembers Dickens , Hickey, Myers, Kelley
Noes: None
Absent: Councilmember Feibusch
I have carefully compared the same with the
original minutes of said meeting on file and of record in my
office and the foregoing is a full, true and correct copy of
the original resolution adopted at said meeting and entered
in said minutes, and said original resolution has not been
amended, modified or rescinded since the date of its adoption
and the same is now in full force and effect.
Dated: 1983 .
Deputy City Clerk-of the
City of Ukiah, California
(Seal)