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principal am ount of the bonds then outstanding or their representatives duly authorized in w riting. T h at the D istrict will cause its books and accounts to be audited annually by an independent certified public accountant and will make available for inspection by the bond­holders, at the office of the T reasurer of said D istrict, and at each fiscal agency of the D istrict in The City of Los Angeles, California, the City of Chicago, Illinois, and the City of New York, New York, a copy of the report of such accountant, and will also upon paym ent of a reason­able charge furnish a copy thereof upon request to any bondholder. Covenant 6. T hat no w ater or other service from the works or properties of the D istrict may be furnished or rendered by the D istrict to any city, town, county, public corporation or political subdivision of the State of Nevada free, nor shall any such service be rendered at lower rates than those charged other persons for similar services; provided, however, that w ater may be furnished for fire protection purposes to such cities, towns, counties, public corporations or political subdivisions at lower rates, but no such rate or rates shall be less than the cost of the service, including reasonable overhead. Buildings or other property of the D istrict shall not be furnished free or at any rate or charge less than the reasonable rental thereof, and shall not be sold at less than the reasonable value thereof. Covenant 7. Subject to the lim itation th at the rates and charges shall be reasonable, the Board shall from tim e to tim e fix and collect from all users thereof, rates and charges for the service, facilities and w ater of the D istrict which will be sufficient, after m aking allowances for contingencies and error in the estimates, to pay the following items of cost and expense in the order set forth in the following table, to w it: (a) costs of operating and m aintaining the works and properties of the D istrict; (b) the general expenses of the D istrict; (c) the principal and interest on all outstanding bonds of the D istrict as the same fall due, and the payments required to be made into the Sinking Fund for said bonds; and the rates and charges shall be so fixed th at annually, after paym ent from revenues of the costs of operation and m aintenance and the general expenses of the District, the rem aining revenue shall be at least one and 40/100ths (1.40) times the maximum annual debt service. Covenant 8. On March 1, 1955, and yearly thereafter on March 1, if after paym ent of all the items of cost and expense for the previous year, as set forth in the table in Covenant 7 hereof, there shall remain in the Revenue Fund moneys in excess of the sum of $500,000, any moneys in excess of said sum of $500,000 shall be set aside from said Revenue Fund and transferred to and placed in the Redemption Fund. Covenant 9. No additional bonds of the D istrict shall be issued under any law of the State of Nevada having any priority in paym ent of principal and interest out of the taxes to be levied by the D istrict or out of revenues of the works or properties of said District, or both, over bonds hereby authorized to be issued and payable out of said taxes and revenues. Covenant 10. T hat no additional indebtedness or bonds of the D istrict payable out of revenues from the works or properties of the D istrict or which may be paid out of such revenues shall be created or incurred unless F irs t: The net income of said works and properties before depreciation, amortization (including transfers to the Redemption Fund) and interest chargeable to income account, as shown by the books of the D istrict for the latest prior fiscal year w ith respect to which such books have been examined and reported upon by an independent certified public accountant employed by the District, plus, at the option of the District, either or both of the items hereinafter in this Covenant designated (a) and (b), shall have amounted to (1) a t least twice (2) the am ount of interest to accrue in th at one of the fiscal years ending thereafter in which the interest so to accrue will be the greatest of all indebtedness outstanding immediately subsequent to the incurring of such additional indebtedness, and (2) at least one and 35/100 (1.35) times the aggregate of the am ount of interest to accrue and paym ents of principal (exclusive of principal m aturing March 1, 1990, of bonds authorized hereunder) required to be made in that one of the fiscal years ending thereafter in which such aggregate (exclusive of principal m aturing March 1, 1990, of bonds authorized hereunder) will be the greatest on all indebtedness to be outstanding immediately subsequent to the incurring of such additional indebtedness. 9 T he items either or both of which may be added to such net income for the purpose of applying the restriction contained in this Covenant 10 are the following: (a) An allowance for earnings from any investm ent made in additions to the works and properties of the D istrict (including investm ent in construction work in progress) which, during all or any part of said fiscal year, were not in service, and any investment to be made in additions to the works and properties of the D istrict (i) out of the proceeds of bonds previously issued, or (ii) out of the proceeds of the bonds representing such additional indebtedness; the am ount of such allowance to be 33-1/3% (or, in the case of any such investment so made or to be made in the acquisition of all or any part of an operating w ater system serving customers when acquired, 100% ) of th at proportion of said net income which the am ount of the investment so made and to be made in such additions to the works and properties of the D istrict bears to the total investment of the D istrict in works and properties in service a t the close of said fiscal year (prorated with respect to any such additions which were in service during a portion of said fiscal y e a r); (b) An allowance for earnings arising from any increase in w ater rates which has become effective prior to the incurring of the additional indebtedness but which during all or any part of said fiscal year was not in effect in an am ount equal to 75% of the am ount by which the billings to customers for such fiscal year would have been increased if such increase in rates had been in effect during the whole of such fiscal year. Section 23. Remedies for Enforcement. T hat in addition to all other remedies, any holder of a bond of the District, including a trustee for bondholders, shall have the right, subject to any contractual limitations binding upon such bondholders or trustee, and subject to the prior or superior rights of o th ers: (1) By mandamus or other suit, action or proceedings, at law or in equity, to enforce his rights against such D istrict and the Board of Directors of such District, including the right to require such D istrict and such Board to fix and collect rates and charges adequate to carry out any agreem ent as to, or pledge of, the revenues produced by such rates or charges, and to require such D istrict and such Board to carry out any other covenants and agreements w ith such bondholder and to perform its and their duties pursuant to law. (2) By action or suit in equity to enjoin any acts or things which may be unlawful or a violation of the rights of such bondholder. (3) By action or suit in equity to require such D istrict to act as if it were the trustee of an express trust for such bondholder. (4) By suit, action, or proceeding in court exercising equitable jurisdiction to obtain the appointm ent of a receiver of the enterprise in which the D istrict is engaged or any part or parts thereof, who may enter and take possession of such utility or any part or parts thereof, including all property, land, property rights, easements, and other adjuncts of the utility, and such receiver may operate and maintain the same, and collect and receive all revenues thereafter arising therefrom in the same manner as such D istrict itself m ight do, and shall deposit all such moneys in a separate account or accounts and apply the same in accordance w ith the obligations of such D istrict as the court shall direct. Section 24. Depositaries of Moneys, Security for Deposits. All moneys received by the D istrict under the provisions of this resolution shall be deposited in such state or national banks in the State of Nevada as the Treasurer of the D istrict shall designate; provided, however, that the Sinking Fund and the subfunds thereunder may be kept on deposit in any national bank or banks within or w ithout the State of Nevada as the Board of Directors shall designate by resolution. All moneys deposited under the provisions of this resolution shall be tru st funds under the term s hereof, and shall not be subject to lien or attachm ent by any creditor of the D istrict. Such moneys shall be held in tru st and applied in accordance w ith the provisions of this resolution. No moneys shall be deposited w ith any depositary outside the State of Nevada in an am ount exceeding fifty percentum (50%) of the am ount which an officer of such depositary shall certify to the Board of Directors as the combined capital and surplus of such depositary. All moneys which are deposited in any depositary within the State of Nevada shall be continuously secured for the benefit of the D istrict and the holders of the bonds by depositing with the Treasurer of the D istrict treasury notes, United States bonds, or bonds of the State of 10