C150207 Contract & Amend 1

• Contract/PO #: C150207
• Contractor Name: East Mancos Highline Ditch Company
• Contract Type: Loan
• Water District: 0
• County: Montezuma
• Loan Projects - Doc Type: Contract Documents

a. the contract has been duly executed by officers of the BoRROwER who are duly
elected or appointed and are authorized to execute the contract and to bind the
BORROWER;
b. the resolutions of the BORROWER authorizing the execution and delivery of the
contract were duly adopted by the BORROWER board of directors and/or
stockholders
c. there are no provisions in the BoRROwER's articles of incorporation or bylaws or any
state or local law that prevent this contract from binding the BoRROwER; and
d. the contract will be valid and binding against the BoRROwER if entered into by the
CWCB.
8. Pledge of Property. The BoRROwER irrevocab(y pledges to the CWCB for purposes of
repayment of this loan: (1) revenues from assessments levied for that purpose as
authorized by the BORROWER'S C@SOIUt1011(S� atld (2� all Of th@ BORROWER rights to
receive said assessment revenues, hereinafter collectively referred to as the "Pledged
Property."
a. Segregation of Pledged Revenues. The BoRROwER shall set aside and keep the
pledged revenues in an account separate from other BORROWER revenues, and
warrants that these revenues will not be used for any other purpose.
b. Establish Security Interest. The BORROWER has duly executed a Security
Agreement, attached hereto as Appendix 4 and incorporated herein, to provide a
security interest to the CWCB in the Pledged Properly. The CWCB shall have
priority over all other competing claims for said Pledged Property, except for the
Iiens of the BoRROwER's existing loans as listed in Section 5(Schedule of Existing
Debt) of the Project Summary, which sets forth the position of the lien created by
this contract in relation to any existing lien(s).
c. Revenue Assessments. Pursuant to its statutory authority, articles of incorporation
and bylaws, the BORROWER shall take all necessary actions consistent therewith
during the term of this contract to levy assessments sufficient to pay this loan as
required by the terms of this contract and the Promissory Note, to cover all
expenditures for operation and maintenance and emergency repair services, and to
maintain adequate debt service reserves. In the event the assessments levied by
the BoRROwER become insufficient to assure such repayment to the CWCB, the
BoRROwER shall immediately take all necessary action consistent with its statutory
authority, its articles of incorporation and bylaws including, but not limited to, levying
additional assessments to raise sufficient revenue to assure repayment of this loan.
d. Debt Service Reserve Account. To establish and maintain the debt service
reserve account equal to finro annual payments, the BORROWER shall deposit an
amount equal to one annual payment into its debt service reserve fund on or before
the date of the first disbursement of loan funds to the BoRROwER pursuant to the
terms of this contract and one-third of an annual payment on the due date of its first
annual loan payment and annually thereafter for the first three years of repayment
of this loan. In the event that the BoRROwER applies funds from this account to
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