MUD Receivables Clause Samples
The MUD Receivables clause defines the rights and obligations related to the collection and assignment of payments owed to a Municipal Utility District (MUD). Typically, this clause outlines how receivables generated from utility services—such as water, sewer, or drainage—are handled, including who is entitled to receive payments and under what conditions these rights may be transferred or pledged, for example, to secure financing. Its core practical function is to ensure clarity and certainty regarding the flow of funds from utility users to the MUD or its assignees, thereby facilitating financial arrangements and reducing disputes over payment entitlements.
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MUD Receivables. At the time of origination of a Project Loan, the Borrower may seek advances in payment of those reimbursements received or to be received by Borrower from a Municipal Utility District (the “MUD”) as a result of expenditures or advances made by the Borrower for the installation and construction of the infrastructure improvements related to an A&D Loan. At the time of the origination of a Project Loan including advances for MUD Receivables, the Borrower shall execute such instruments as Lender may reasonably require which assign the MUD Receivables to Lender as additional collateral for payment of the Loan and such advances shall be contingent upon acknowledgment of the assignment of the MUD Receivable by the MUD by an instrument that is reasonably acceptable to Lender.
MUD Receivables. For certain A&D Projects, the costs for constructing utility infrastructure may be reimbursed by the applicable municipal utility district (such reimbursements are referred to herein as “MUD Receivables”). At the time of the origination of an A&D Loan for an A&D Project where MUD Receivables are anticipated, Borrower shall execute such instruments as Lender may reasonably require to assign the MUD Receivables to Lender as additional collateral for payment of the Note, and any Advances for such A&D Loan shall be conditioned upon the applicable municipal utility district’s execution and delivery to Lender of a written acknowledgment of the assignment of the MUD Receivables, in form and content reasonably acceptable to Lender.