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elected or appointed and are authorized to execufie the contra�t �nd to bind the <br />BORROWER; <br />b. the resolutions of the BC)RROWER authorizing the execution ar�d delivery of the <br />contract were duly adopted by the BORROWER board of direetors and/or <br />stockholders <br />c. there are no provisions in fih� BoRROw�R articles of incorporation or bylaws or any <br />sta�e or loc�l ia�v that pre�en# this confiract from binding fihe BoRROwE�t; and <br />d. the contract wiU be valid and binding against the BoRROw�R if entered into by the <br />CWCB. <br />8. Rledge pf Properly. The BoR�tow�R irrevacably pledges ta the CWCB far purposes of <br />repaymenfi of this loan: {1) revenues from assessments levied for that purpose as <br />author�zed by #he Bo�tROwErt's resoEution(s) and (2) aif of the BoRt�owE�t's rights to <br />receive said assessment revenues, hereinafter caflectively referred to as the "Pledged <br />Properly." <br />a. Segreg�tion of Pledged Ftevenues. The BoRROw�R shall set aside and keep tMe <br />pledged rever►ues in an aceount separate from other BoRRpwER revenues, and <br />warrants that fihese revenues will nofi be used for any o#her purpose. <br />b. Establish Security Interes#. The BORROWER has duiy execufied a Security <br />Agreement, attached hereto as Appendix 4 and incorporated Merein, to provide a <br />security interest to the CWCB in the Pledged Property. The CWCB shall have <br />priari�ty nver all o#her �ompeting claims for said Pledged Property, ex+c�;p# far the <br />liens of the BoRROwE�t's exisfiing loans as listed in Section 5{Schedule of Existing <br />Debt) of #he Prvject �ummary, which �ets forth the position of the lien creafied by <br />this con#ra�t in relation to any existing lien(s). <br />c. Revenue Assessments. Pursuant fio its statutory authority, articles of incorporation <br />and bylaws, the BoRROw��2 shall take all necessary actions consist�nt therewith <br />during the term �f thi� cvrrfiract to levy assessr�nents sufficienfi to p�y fihis loan a5 <br />required by the terms of this contract and the Promissory Note, to cover ail <br />expenditures for operation and maintenance and emergency repair services, and to <br />maintain adequate debt service reserves. In the event the assessments levied by <br />the Bor�towER become insufficient to assure such repayment to the CWCB, the <br />BoftROwER shall immediately take a{I necessary action consistent with its statutory <br />au#horifiy, its articles of incorporafiion and bylaws including, but not limi#ed to, levying <br />additional assessmen#s to raise sufficient revenue to assure repayment of this loan. <br />d. 0►ebt Service Reserve Account. Ta establish and mainta'tn the debt service <br />res�rve account, the Bo�ROwEr� sF�all deposit an amount equal to one-fienth ofi an <br />annual payment into its debt service reserve fund on the due da#e of its first annual <br />loan payment and annually thereafter for the f'►rst ten years of repayment of this <br />loan. In the event that the Bo��tow�R applies funds from this account to <br />repayment of the loan, the Bo�ROwER sha11 replenish the account within ninety <br />(90) days of withdrawal ofi the fund�. <br />9. Collateral. The c411�teral for this loan is described in Section 6(Collateral) of the <br />Loan Cvntract C15027� <br />Page 3 of 11 <br />