C150210 Paid in Full Contract - Laserfiche WebLink

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KUTAK ROCK LLP Chad Henderson April 17, 2006 Page 5 (1) The District is currently in substantial compliance with all obligations of the CWCB Loan Contracts and the documents providing for the issuance of all outstanding parity obligations. (2) The District is current in the payment of all outstanding parity obligations and the reserve accounts established as security for the outstanding parity obligations are fully funded. (3) The District will fully fund the reserve accounts securing the CWCB Loans prior to or before the date of closing on the 2006 Authority Loan rather than waiting the permitted ten- year period for the funding of such accounts. The District will also fully fund a reserve account for the 2006 Authority Loan (which is not required under the agreement between the District and the Authority providing for the 2006 Authority Loan). Such reserve accounts, together with the reserve accounts established for the outstanding parity obligations, will result in aggregate reserve account balances of $2,792,987 until calendar year 2008, at which time the reserve account balance will be reduced to $2,716,326 to equal the maximum annual debt service amount on the District's parity lien obligations. (4) The District will consider a rate increase of 9% in January of 2007 as part of its annual policy to incrementally increase its system rates and charges. In making such determination, the Board of Directors will consider, among other things, new system customers which begin service in 2006 and the net revenue which will reasonably result from said customers. Please advise me if the attached letter agreement containing the above covenants and representations is acceptable or if modifications or additions are necessary. Chad, I appreciate your time and efforts ' ection with this request. ectfully submitted, Mir IN Peltz cc: Hank Whittet ' Paula Rosenberg Kutak Rock-Firm Library-4835-8633-4976.1