|
<br />assessments to raise sufficient revenue to assure repayment of this loan.
<br />
<br />d. Assessments For Operations, Maintenance And Reserves. Pursuant to its statutory
<br />authority, articles of incorporation and bylaws, the BORROWER shall levy assessments in
<br />sufficient amounts to provide funds for adequate operation and maintenance,
<br />emergency repair services, and obsolescence and debt service reserves.
<br />
<br />e. Debt Service Reserve Account. To establish and maintain the debt service reserve
<br />account, the BORROWER shall deposit an amount equal to one-tenth of an annual
<br />payment into its debt service reserve fund on the due date of its first annual loan
<br />payment and annually thereafter for the first ten years of this loan. In the event that the
<br />BORROWER applies funds from this account to repayment of the loan, the BORROWER
<br />shall replenish the account within ninety (90) days of withdrawal of the funds.
<br />
<br />7, Collateral. The collateral for this loan is described in Section 4 (Collateral) of the Project
<br />Summary, and secured by the instrument(s) attached hereto as Appendix 5 and
<br />incorporated herein. The BORROWER shall not sell, convey, assign, grant, transfer,
<br />mortgage, pledge, encumber, or otherwise dispose of the collateral for this loan, including
<br />the Pledged Property, so long as any of the principal, accrued interest, and late charges,
<br />if any, on this loan remain unpaid, without the prior written concurrence of the CWCB. In
<br />the event of any such sale, transfer or encumbrance without the CWCB's written
<br />concurrence, the CWCB may at any time thereafter declare all outstanding principal,
<br />interest, and late charges, if any, on this loan immediately due and payable.
<br />
<br />8. Release After Loan Is Repaid. Upon complete repayment to the CWCB of the entire
<br />principal, all accrued interest, and late charges, if any, as specified in the Promissory Note,
<br />the CWCB agrees to release and terminate any and all of the CWCB's right, title, and
<br />interest in and to the collateral and the property pledged to repay this loan.
<br />
<br />9. Warranties.
<br />
<br />a. The BORROWER warrants that, by accepting the loan money under this contract and by
<br />its representations herein, the BORROWER shall be estopped from asserting for any
<br />reason that it is not authorized or obligated to repay the loan to the CWCB as required
<br />by this contract
<br />
<br />b. The BORROWER warrants that it has not employed or retained any company or person,
<br />other than a bona fide employee working solely for the BORROWER, to solicit or secure
<br />this contract and has not paid or agreed to pay any person, company, corporation,
<br />individual, or firm, other than a bona fide employee, any fee, commission, percentage,
<br />gift, or other consideration contingent upon or resulting from the award or the making of
<br />this contract
<br />
<br />c. The BORROWER warrants that the collateral for this loan is not encumbered by any
<br />other deeds of trust or liens of any party other than the CWCB or in any other manner.
<br />
<br />10. Change of Ownership of Water Shares During Term of Contract. If the interest rate
<br />for this loan is based on the CWCB's agricultural or blended agricultural and municipal
<br />and/or commercial and/or industrial rates, the BORROWER agrees to notify the STATE of
<br />any change of the ownership of the water rights represented by its shares from irrigation
<br />to municipal or commercial or industrial use. The interest rate shall be revised when said
<br />
<br />Tilton Lateral, Inc.
<br />
<br />Page 3 of9
<br />
<br />Loan Contract
<br />
<br />
|