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<br />commission, percentage, gift, or other consideration contingent upon or resulting from the <br />award or the making of this contract. <br /> <br />d. The BORROWER is an enterprise legally created and maintained in compliance with S 37-45.1- <br />101, et sea., C.R.S., and Article X, Section 20 of the Colorado Constitution, and has authority <br />to enter into this contract with the STATE. The BORROWER and/or the DISTRICT shall <br />immediately notify the STATE in writing if the circumstances which formulate the basis of this <br />warranty change. <br /> <br />e. The collateral identified in the Collateral Provisions of this contract is not encumbered by any <br />other liens or in any other manner. <br /> <br />f. The specific revenues to be pledged to repay the STATE under this contract shall be water <br />user rates, charges and fees ("water system revenues"), the establishment of which have <br />been authorized by resolution of the BORROWER. The DISTRICT and the BORROWER hereby <br />pledge sufficient annual water system revenues to pay the annual installment amount <br />pursuant to the Promissory Note attached to this contract, and hereby agree to establish a <br />separate account into which all such moneys shall be deposited. <br /> <br />11. Pledge of revenues. The BORROWER hereby irrevocably pledges to the STATE, for purposes of <br />repayment of this loan, water system revenues levied for that purpose as authorized by its <br />resolutions, and any other funds legally available to the BORROWER, in an amount sufficient to <br />pay the annual payment due under this contract ("pledged revenues"). Further, the BORROWER <br />agrees to: <br /> <br />a. Keep pledged revenues separate. The BORROWER shall set aside and keep the pledged <br />revenues in an account separate from other BORROWER revenues, and warrants that these <br />revenues will not be used for any other purpose. <br /> <br />b. Security interest in pledged revenues. To provide a security interest to the STATE in the <br />pledged revenues so that the STATE shall have priority over all other competing claims for <br />said revenues, the BORROWER has duly executed a Security Agreement, attached hereto <br />as Appendix D and incorporated herein. <br /> <br />c. Rate Covenant. Pursuant to its statutory authority and as permitted by law, the <br />BORROWER shall take all necessary actions consistent therewith during the term of this <br />contract to establish, levy and collect water rates, charges and fees in amounts sufficient <br />to pay this loan as required by this contract and the promissory note, to cover all <br />expenditures for operation and maintenance and emergency repair services, and to <br />maintain adequate debt service reserves, including obtaining voter approval, if necessary, <br />of increases in the BORROWER'S water user fees. <br /> <br />d. Debt Service Reserve Account. Commencing on the due date of the Borrower's first <br />loan payment, the BORROWER shall deposit an amount equal to one-tenth of an annual <br />loan payment into its debt service reserve account, and annually for the first ten years of <br />repayment of this loan. In the event that the Borrower applies funds from this account to <br />repayment of the loan, the Borrower shall replenish the account within ninety (90) days of <br />withdrawal of the funds. <br /> <br />e. Additional Debts or Bonds. The BORROWER shall not issue any indebtedness payable <br />from the pledged revenues and having a lien thereon which is superior to the lien of this <br />loan. The BORROWER may issue parity debt only with the prior written approval of the <br />STATE, provided that: <br /> <br />Silt Water Conservancy District Water Activity Enterprise and <br />Silt Water Conservancy District <br /> <br />Page 6 of 13 <br />