C153771 Contract Communication - Laserfiche WebLink

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Linda J. Bassi, Esq. September 12, 1997 Page 11 and for the annual lease payment, to the extent that this cannot be paid by interest generated by the escrowed funds, and for the return to HCWUA of any unused escrowed funds upon satisfaction of all other escrow requirements (for example, if yet another annual lease payment is made by HCWUA without using escrowed funds, at least $16,000 will remain in escrow after the subsequent purchase of the Box Springs Water Rights-these funds should then be returned to HCWUA for general use). * The paragraph numbered I on the first page should recite that it is subject to the Escrow Agreement. * The "Upon Such Default" paragraph on page 2 contains vague and troublesome language allowing the State to deem itself insecure and declare all obligations due and payable. This language should be deleted or qualified to provide some sort of reasonableness standard. * This document, like the other security instruments, should provide an opportunity for cure. Assignment of Escrow Account as Security - Appendix 7 * A number of the comments made above are applicable here as well. For example, the instrument seems unnecessary if the Escrow Agent is directed to pay the principal to the State in the event that the Box Springs purchase does not close. If, nonetheless, the State requires this instrument, it should provide for releases as the escrow funds are disbursed. This will require revision of paragraph 1. * With respect to paragraph 2, the State should approve in advance the disbursement of funds by the Escrow Agent to pay the purchase price for the Box Springs Water Rights and for lease payments. * Paragraph 6 should contain the qualifier, "except as permitted in the Escrow Agreement." Security Agreement - Appendix 8 * See previous comments.