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principal amount of the bonds then outstanding or their representatives duly authorized in writing. That the District 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 Treasurer of said District, and at each fiscal agency of the District 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 payment of a reason­able charge furnish a copy thereof upon request to any bondholder. C o v e n a n t 6. That no water or other service from the works or properties of the District may be furnished or rendered by the District 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 water 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 District 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. Uov utmost -3„ Subject to She Lbwiteitirja!. t-kai:. tks-S?:»o(V.= vhifliihks? reasonable, the Board shall from time to time fix and collect from all users thereof, rates and charges for the service, facilities and water of the District which will be sufficient, after making 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 maintaining the works and properties of the D istrict; (b) the general expenses of the District; (c) the principal and interest on all outstanding bonds of the District 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 that annually, after payment from revenues of the costs of operation and maintenance and the general expenses of the District, the remaining revenue shall be at least one and 40/100ths (1.40) times the maximum annual debt service. C o v e n a n t 8. On March 1, 1955, and yearly thereafter on March 1, if after payment 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. C o v e n a n t 9. No additional bonds of the District shall be issued under any law of the State of Nevada having any priority in payment of principal and interest out of the taxes to be levied by the District 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. C o v e n a n t 10. That no additional indebtedness or bonds of the District payable out of revenues from the works or properties of the District or which may be paid out of such revenues shall be created or incurred unless F i r s 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 District for the latest prior fiscal year with 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) at least twice (2) the amount of interest to accrue in that one of the fiscal years ending thereafter in whiclT 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 amount of interest to accrue and payments of principal (exclusive of principal maturing 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 maturing 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 The 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 investment made in additions to the works and properties of the District (including investment 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 District (i) out of the proceeds of bonds previously issued, or (ii) out of the proceeds of the bonds representing such additional indebtedness; the amount 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 water system serving customers when acquired, 100%) of that proportion of said net income which the amount of the investment so made and to be made in such additions to the works and properties of the District bears to the total investment of the District in works and properties in service at the close of said fiscal year (prorated with respect t o a n y 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 water 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 amount equal to 75% of the amount 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. R e m e d i e s f o r E n f o r c e m e n t . That in addition to all other remedies, any holder o f 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 others: (1) By mandamus or other suit, action or proceedings, at law or in equity, to enforce his rights against such District and the Board of Directors of such District, including the right to require such District and such Board to fix and collect rates and charges adequate to carry out any agreement as to, or pledge of, the revenues produced by such rates or charges, and to require such District and such Board to carry out any other covenants and agreements with 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 District 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 appointment of a receiver of the enterprise in which the District 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 District itself might do, and shall deposit all such moneys in a separate account or accounts and apply the same in accordance with the obligations of such District as the court shall direct. Section 2 4 . D e p o s i t a r i e s o f M o n e y s , S e c u r i t y f o r D e p o s i t s . All moneys received by the District 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 District 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 without the State of Nevada as the Board of Directors shall designate by resolution. All moneys deposited under the provisions of this resolution shall be trust funds under the terms hereof, and shall not be subject to lien or attachment by any creditor of the District. Such moneys shall be held in trust and applied in accordance with the provisions of this resolution. No moneys shall be deposited with any depositary outside the State of Nevada in an amount exceeding fifty percentum (50% ) of the amount 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 District and the holders of the bonds by depositing w i t h t h e Treasurer of the District treasury notes, United States bonds, or bonds of the State of 10