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<br />for any purpose other than repayment of this loan.
<br />
<br />b. Establish Security Interest. To provide a security interest to the CWCB in the Fund so
<br />that the CWCB shall have priority over all other competing claims for said Fund, the
<br />BORROWER has duly executed a Security Agreement, attached hereto as Appendix 4 and
<br />an Assignment of Investment Fund and Interest, attached hereto as Appendix 5, both of
<br />which are incorporated herein.
<br />
<br />c. No Additional Debts or Bonds. The BORROWER shall not issue or incur any indebtedness
<br />other than that incurred under this contract payable from the Fund.
<br />
<br />d. Annual Statement of Debt Coverage. Each year during the term of this contract, the
<br />BORROWER shall submit to the CWCB the BORROWER'S annual audit report.
<br />
<br />e. Reinvestment procedure. In the event that an "INC Downgrade" occurs (as defined in the
<br />MBIA Agreement) and MBIA, Inc. delivers the balance of the Fund to the escrow account at
<br />the Bank of Cherry Creek, a branch of Western National Bank ("Bank"), established by an
<br />Escrow Agreement among the CWCB, the BORROWER, and the Bank, which is
<br />incorporated herein by reference, or to another escrow account agreed upon by the
<br />BORROWER and the CWCB, the BORROWER, in consultation with the CWCB, will use its
<br />best efforts to enter into a replacement investment agreement to establish a new annuity
<br />fund that will generate, with principal and interest, sufficient amounts to meet the District's
<br />actual Loan repayment obligation to the CWCB. The BORROWER shall obtain the
<br />CWCB's approval before entering into a replacement investment agreement.
<br />
<br />7. Collateral During Repayment. The BORROWER shall not sell, convey, assign, grant, transfer,
<br />mortgage, pledge, encumber, or otherwise dispose of the Fund so long as any of the principal,
<br />accrued interest, and late charges, if any, on this loan remain unpaid, without the prior written
<br />concurrence of the CWCB. In the event of any such sale, transfer or encumbrance without the
<br />CWCB's written concurrence, the CWCB may at any time thereafter declare all outstanding
<br />principal, interest, and late charges, if any, on this loan immediately due and payable. In the
<br />event of an "INC Downgrade," section A.6.e herein shall apply.
<br />
<br />8. Release After Loan Is Repaid. Upon complete repayment to the CWCB of the entire principal,
<br />all accrued interest, and late charges, if any, as specified in the Promissory Note, the CWCB
<br />agrees to release and terminate any and all of the CWCB's right, title, and interest in and to the
<br />Fund pledged to repay this loan, and to notify MBIA, Inc. of any such release and termination in
<br />writing.
<br />
<br />9. Warranties.
<br />
<br />a. The BORROWER warrants that, by acceptance of the LOAN AMOUNT pursuant to the terms of
<br />this contract and by the BORROWER'S representation herein, the BORROWER shall be
<br />estopped from asserting for any reason that it is not authorized or obligated to repay this loan
<br />to the CWCB as required by this contract.
<br />
<br />b. The BORROWER warrants that it has not employed or retained any company or person, other
<br />than a bona fide employee working solely for the BORROWER, and the BORROWER'S General
<br />Counsel, financial consultant, and Consulting Engineer, to solicit or secure this contract and
<br />has not paid or agreed to pay any person, company, corporation, individual, or firm, other
<br />than a bona fide employee, any fee, commission, percentage, gift, or other consideration
<br />contingent upon or resulting from the award or the making of this contract.
<br />
<br />c. The BORROWER warrants that the Fund pledged as security for this loan is not encumbered
<br />by any other liens or in any other manner.
<br />
<br />10. Remedies For Default. Upon default in the payments to be made by the BORROWER to the
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