21 ATTACHMENT 3 - Laserfiche WebLink

84 of LAVWMA or such Member. The resulting financial or operational impacts on LAVWMA or the Member could be material. Investment of Funds All funds and accounts held under the Indenture are required to be invested in Authorized Investments as provided under the Indenture. See Appendix D for a summary of the definition of Authorized Investments. See the Members’ financial statements attached as Appendix A for a summary of the Members’ investments as of the date of such financial statements. All investments, including the Authorized Investments and those authorized by law from time to time for investments by public agencies, contain a certain degree of risk. Such risks include, but are not limited to, a lower rate of return than expected, loss of market value and loss or delayed receipt of principal. The occurrence of these events with respect to amounts held under the Indenture or by the Members, including but not limited to the Rate Stabilization Fund, could have a material adverse effect on the security of the 2021 Bonds. Limitations on Remedies and Bankruptcy The rights and remedies provided in the Indenture and the Sewer Service Contract may be limited by and are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, and to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State of California. The various opinions of counsel to be delivered with respect to such documents, including the opinion of Bond Counsel (the form of which is attached as Appendix F), will be similarly qualified. The enforcement of the remedies provided in the Indenture and the Sewer Service Contract could prove both expensive and time consuming. In the event of a default, the Trustee is not empowered to accelerate the payments on the 2021 Bonds or sell any facilities of the LAVWMA Enterprise in order to pay debt service on the 2021 Bonds. In addition, the rights and remedies provided in the Indenture and the Sewer Service Contract may be limited by and are subject to provisions of the federal bankruptcy laws, as now or hereafter enacted, and to other laws or equitable principles that may affect creditors’ rights. If LAVWMA or a Member were to file a petition under Chapter 9 of the Bankruptcy Code (Title 11, United States Code), the owners of the 2021 Bonds and the Trustee could be prohibited or severely restricted from taking any steps to enforce their rights under the Sewer Service Contract. No Debt Service Reserve Fund Neither LAVWMA nor the Members are obligated to fund or maintain a debt service reserve fund for the 2021 Bonds. Parity Bonds Although LAVWMA has covenanted not to issue additional obligations payable from LAVWMA Net Revenues that are senior to the 2021 Bonds, the Indenture permits the issuance by LAVWMA of certain indebtedness that may have a lien upon the LAVWMA Net Revenues which is on a parity basis to the 2021 Bonds (see “SECURITY FOR THE 2021 BONDS – Parity Bonds” in this Official Statement).