Consent of creditors to refunding of indebtedness

(1) Before authorizing the issuance of bonds under ORS 545.565 to 545.621, the board of directors shall require that the known holders or their representatives of not less than 80 percent of the total amount of all evidences of indebtedness, whether warrants, bonds or certificates that are to be retired or refunded, shall submit to the board of directors for its acceptance an offer: (a) To deliver and surrender all evidences of indebtedness in exchange for bonds or cash, or both, not exceeding the maximum amount of the total assessment; or (b) To accept in full payment of the outstanding indebtedness a sum of money or refunding bonds, or both, representing the proportion which the total proposed refunding payment bears to the total outstanding indebtedness proposed to be refunded, based on the par value of the proposed refunding payment. The creditors must agree to absorb the loss between the amount of the total outstanding indebtedness and the amount of the refunding payment, and to receive the refunding bonds or cash, or both, in full payment, satisfaction and discharge of the outstanding. The creditors must further agree to make such proper pro rata distribution of the refunding payment as is required to retire and discharge the total outstanding indebtedness proposed to be refunded. (2) The offer shall be in writing and when submitted to the board of directors and accepted by the board, the offer shall be irrevocable until after the board of directors has had the opportunity to authorize the issuance, sale and delivery of refunding bonds to replace and discharge the outstanding indebtedness. Any litigation that is intended to or will restrain or prevent the board of directors from issuing and delivering the refunding bonds shall not subject the offer to revocation until after the litigation is concluded and the board of directors has a reasonable time thereafter in which to issue, sell and deliver the refunding bonds. The offer shall be considered accepted by the board of directors upon delivery of the offer to the board.