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a. Segregation of Pledged Power Revenues. The PLEDGED POWER REVENUES shall be <br /> accounted for and maintained in an account separate from other BORROWER revenues at all <br /> times. The PLEDGED POWER REVENUES shall be used first to pay the annual payment to the <br /> CWCB on the Loan Amount including debt service and all other PARny INDEBTEDNESS on an <br /> equal basis, then all PLEDGED REVENUES in excess of such sum, as received by Borrower, <br /> shall be released automatically from the lien securing Borrower's obligation to repay the <br /> LOAN AMOUNT and may be used as determined by BORROWER for any lawful purpose. <br /> b. Establish Security Interest. The BORROWER has duly executed a SECURITY AGREEMENT, <br /> attached hereto as APPENDIX 5 and incorporated herein, to provide a security interest to the <br /> CWCB in the PLEDGED POWER REVENUES. The lien of this LOAN CONTRACT on the PLEDGED <br /> POWER REVENUES shall have priority over all other competing claims with respect to the <br /> PLEDGED POWER REVENUES. <br /> c. Debt Service Reserve Account or Fund. To establish and maintain the debt service <br /> reserve account or fund, the BORROWER shall deposit an amount equal to one-tenth of an <br /> annual payment into its debt service reserve account or fund on the due date of its first annual <br /> loan 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, the <br /> BORROWER shall replenish the account with the first available PLEDGED POWER REVENUES. <br /> The debt service reserve account or fund requirement is in effect until the loan is paid in <br /> full. <br /> d. Additional Debts or Bonds. The BORROWER shall not issue any indebtedness payable <br /> from the PLEDGED POWER REVENUES and having a lien thereon which is superior to the lien of <br /> this loan. The BORROWER may issue parity debt only with the prior written approval of the <br /> CWCB, provided that: <br /> i. The BORROWER is currently and at the time of the issuance of the parity debt in <br /> substantial compliance with all of the obligations of this CONTRACT, including, but <br /> not limited to, being current on the annual payments due under this CONTRACT and <br /> in the accumulation of all amounts then required to be accumulated in the <br /> BORROWER'S debt service reserve fund; <br /> ii. The BORROWER provides to the CWCB a Parity Certificate from an independent <br /> certified public accountant certifying that, based on an analysis of the BORROWER's <br /> revenues, for 12 consecutive months out of the 18 months immediately preceding the <br /> date of issuance of such parity debt, taking into account all rate adjustments <br /> schedule to be made within the following 24 calendar months, the BORROWER'S <br /> PLEDGED POWER REVENUES are projected to be sufficient to pay its annual debt service <br /> on all outstanding indebtedness having a lien on the PLEDGED POWER REVENUES, <br /> including this loan, the annual debt service on the proposed indebtedness to be <br /> issued, and all required deposits to any reserve funds required by this CONTRACT or <br /> by the lender(s) of any indebtedness having a lien on the PLEDGED POWER REVENUES; <br /> Page 5 of 14 <br />