|
<br />repayment of this loan revenues from assessments levied for that purpose as authorized by the
<br />BORROWER'S resolution and all of the BORROWER'S rights to receive said assessment revenues
<br />from its members (hereinafter collectively referred to as the "pledged property"), Furthermore,
<br />BORROWER agrees that
<br />
<br />a. Revenues For This Loan Are To Be Kept Separate. The BORROWER hereby agrees to set
<br />aside and keep. the pledged revenues in an account separate from other BORROWER
<br />revenues, and warrants that it shall not use the pledged revenues for any other purpose.
<br />
<br />b. Establish Security Interest. The BORROWER agrees that, in order to provide a security
<br />interest for the STATE in the pledged property so that the STATE shall have priority over all
<br />other competing claims for said property, it shall execute a Security Agreement, attached
<br />hereto as Appendix 4 incorporated herein, and an Assignment of Deposit Account as
<br />Security, attached as Appendix 5 and incorporated herein, prior to the disbursement of any
<br />loan funds. The BORROWER acknowledges that the STATE shall perfect its security interest in
<br />the BORROWER'S right to receive assessment revenues by filing a UCC-1 Form with the
<br />Colorado Secretary of State.
<br />
<br />c, Assessments For Repayment Of The Loan. Pursuant to its statutory authority, articles of
<br />incorporation and by-laws, and as authorized by its resolution, the BORROWER shall take all
<br />necessary actions consistent therewith to levy assessments sufficient to pay this loan as
<br />required by the terms of this contract and the promissory note. In the event the assessments
<br />levied by the BORROWER become insufficient to assure such repayment to the STATE, the
<br />BORROWER shall immediately take all necessary action consistent with its statutory authority,
<br />its articles of incorporation, bylaws and resolution, including, but not limited to, levying
<br />additional assessments to raise sufficient revenue to assure repayment of the loan to the
<br />STATE.
<br />
<br />d. Assessments For Operations, Maintenance And Reserves. Pursuant to its statutory
<br />authority, articles of incorporation, by-laws, and resolutions, the BORROWER shall levy
<br />assessments from time to time as necessary to provide sufficient funds for adequate
<br />operation and maintenance, emergency repair services, obsolescence reserves and debt
<br />service reserves. BORROWER shall deposit an' amount equal to one-tenth of an annual
<br />payment into its debt service reserve fund one year from the first loan disbursement, and
<br />annually thereafter for the first ten years of this loan, In the event that the Borrower applies
<br />funds from this account to repayment of the loan, the Borrower shall replenish the account
<br />within ninety (90) days of withdrawal of the funds,
<br />
<br />13. Change of Use of Water Shares During Term of Contract. The BORROWER agrees to notify
<br />the STATE of any change of the use of the water rights represented by its shares from irrigation
<br />to municipal or commercial use, at which time the STATE, at its discretion, may adjust the
<br />interest rate on that portion of the outstanding loan amount corresponding to the percentage of
<br />shares for which the use has been changed to the CWCB's municipal or commercial rate in
<br />effect at the time of the change of use of the water rights, The parties shall execute a contract
<br />amendment to effect said change in interest rate.
<br />
<br />14. Collateral During Repayment. The BORROWER shall not sell, convey, assign, grant, transfer,
<br />mortgage, pledge, encumber, or otherwise dispose of the PROJECT or the property provided as
<br />security for this loan, so long as any of the principal, all accrued interest, and late charges, if
<br />any, on this loan remain unpaid, without the prior written concurrence of the STATE, In the
<br />event of any such sale, transfer or encumbrance without the STATE'S written concurrence, the
<br />STATE may at any time thereafter declare all outstanding principal and interest on this loan
<br />
<br />Plumb and Dailey Ditch Company
<br />
<br />Page 6 of 12
<br />
<br />Loan Contract
<br />
|