C150205 Contract

• Contract/PO #: C150205
• Contractor Name: Veits Pipeline Company
• Contract Type: Loan
• Water District: 34
• County: Montezuma
• Loan Projects - Doc Type: Contract Documents

BORROWER;
b. the resolutions of tf�e 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 corrtract from binding the BoRROwER; and
d. the contract will be valid and binding against the BoRROw�R if entered into by the
CWCB.
8. Pledge Of Property. The BoRROwER irrevocably piedges to the CWCB for purposes of
repayment of #his loan: (1} revenues from assessments levied for that purpose as
authorized by the BoRROwER's resolution(s) and (2) all of the BoRROwER's rights to
receive said assessment revenues, hereinafter collectively referred to as the "Pledged
Property."
a. Segregation of Pledged Revenues. The BoRROw�R shall set aside and keep fhe
pledged revenues in an acxount 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 Property. The CWCB shall have
priority over all other competing cfaims for said Pledged Property, except for the
liens of the BoRROwER's exis6ng laans 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 n�;cessary actions consistent therewith
during the term o# this contract to levy assessments suffiaent 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 senrice reserves. !n the event the assessments tevied by
the BoRROwER become insufficient to assure such repayment to the CWCB, the
BoRROwER shafl immediately take all necessary action consistent with its statutory
authority, its artictes of incorporation and bylaws including, but not limited to, levying
additionai 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 deposif 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 BoFtr�owER pursuant to the
terms of #his contract and one-third of an annual payment on the due date of its first
annual loan payment and annually #hereafter for the first three years of repayment of
this loan. In the event that the BoRROwER applies funds from this account to
repayment of the loan, the BoRROwER shall reptenish the account within ten (10}
months of witMdrawal of any of the iunds.
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