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<br />a. the contract has been duly executed by officers of the BORROWER who are duly <br />elected or appointed and are authorized to execute the contract and to bind the <br />BORROWER; <br /> <br />b. the resolutions of the BORROWER authorizing the execution and delivery of the <br />contract were duly adopted by the BORROWER'S board of directors and/or <br />stockholders <br /> <br />c. there are no provisions in the BORROWER'S articles of incorporation or bylaws or any <br />state or local law that prevent this contract from binding the BORROWER; and <br /> <br />d. the contract will be valid and binding against the BORROWER if entered into by the <br />CWCB. <br /> <br />8. Revenue Assessments. Pursuant to its statutory authority, articles of incorporation <br />and bylaws, the BORROWER shall take all necessary actions consistent therewith during <br />the term of this contract to levy assessments sufficient to pay this loan as required by <br />the terms of this contract and the Promissory Note, to cover all expenditures for <br />operation and maintenance and emergency repair services, and to maintain adequate <br />debt service reserves. In the event the assessments levied by the BORROWER become <br />insufficient to assure such repayment to the CWCB, the BORROWER shall immediately <br />take all necessary action consistent with its statutory authority, its articles of <br />incorporation and bylaws including, but not limited to, levying additional assessments to <br />raise sufficient revenue to assure repayment of this loan. <br /> <br />9. 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 repayment of this loan. In the <br />event that the BORROWER applies funds from this account to repayment of the loan, <br />the BORROWER shall replenish the account within ninety (90) days of withdrawal of the <br />funds. <br /> <br />10. Collateral. The collateral for this loan is described in Section 6 (Collateral) of the <br />Project Summary, and secured by the instrument(s) attached hereto as Appendix 4 <br />and incorporated herein. <br /> <br />11. Collateral During Loan Repayment. The BORROWER shall not sell, convey, assign, <br />grant, transfer, mortgage, pledge, encumber, or otherwise dispose of the Collateral or <br />the Pledged Property so long as any of the principal, accrued interest, and late <br />charges, if any, on this loan remain unpaid, without the prior written concurrence of <br />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 <br />outstanding principal, interest, and late charges, if any, on this loan immediately due <br />and payable. <br /> <br />12. 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 <br />Note, the CWCB agrees to release and terminate any and all of the CWCB's right, title, <br />and interest in and to the Collateral and the Pledged Property. <br /> <br />Loan Contract C150236 <br />Page 3 of 11 <br />