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<br />executed by officers of the BORROWER who are duly elected or appointed and are authorized to <br />execute the contract and to bind the BORROWER; that the election held by the BORROWER to <br />obtain voter approval of this loan met all requirements of the Colorado Constitution or any other <br />state or local law, that the ordinances/resolutions of the BORROWER authorizing the execution and <br />delivery of the contract were duly adopted by the goveming body of the BORROWER; that there <br />are no provisions in the Colorado Constitution or any other state or local law that prevent this <br />contract from binding the BORROWER; and that the contract will be valid and binding against the <br />BORROWER if entered into by the STATE. <br /> <br />8. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment and <br />evidencing this debt in the amount of up to $922,000 at an interest rate of 4% per annum for a <br />term of thirty (30) years is attached as Appendix B and incorporated herein. <br /> <br />a. Final Loan Amount. In the event that the final loan amount is at least 90% of the <br />AUTHORIZED LOAN AMOUNT, the STATE shall apply the remaining loan funds to reduce the <br />final loan amount and the annual loan payment shall remain the same. If the final loan <br />amount is less than 90% AUTHORIZED LOAN AMOUNT, the State may apply those funds to <br />reduce the final loan amount with the BORROWER'S consent, or the STATE and the <br />BORROWER shall execute a REVISION LETTER, attached hereto as Appendix C and <br />incorporated herein, which will establish the final loan amount and amend or replace the <br />loan documents that reflect the final loan amount, including the Promissory Note and <br />Security Agreement. . <br /> <br />b. Interest During Construction. As the loan funds are disbursed by the STATE to the <br />BORROWER during PROJECT completion, interest shall accrue at the rate of 4% per annum. <br />The amount of the interest accrued during PROJECT completion shall be calculated by the <br />STATE and the BORROWER shall repay that amount to the STATE either within ten (10) days <br />after the date the STATE notifies the Borrower of the amount due, or, at the STATE'S <br />discretion, the amount shall be deducted from the final disbursement of loan funds that the <br />STATE makes to the BORROWER. <br /> <br />9. Warranties. The BORROWER warrants the following: <br /> <br />a. By acceptance of the loan money pursuant to the terms of this contract and by its <br />representations herein, the BORROWER shall be estopped from asserting for any reason that <br />the BORROWER is not authorized or obligated to repay the loan money to the STATE as <br />required by this contract. <br /> <br />b. The BORROWER has full power and authority to enter into this contract. The execution and' <br />delivery of this contract and the performance and observation of its terms, conditions and <br />obligations have been duly authorized by all necessary actions of the BORROWER. <br /> <br />c, The BORROWER has not employed or retained any company or person, other than a bona fide <br />employee working solidly for the BORROWER, to solicit or secure this contract. The <br />BORROWER has not paid or agreed to pay any person, company, corporation, individual, or <br />firm, other than a bona fide employee, any fee, commission, percentage, gift, or other <br />consideration contingent upon or resulting from the award or the making of this contract. <br /> <br />10, Pledge of revenues. The BORROWER hereby irrevocably pledges to the STATE, for purposes of <br />repayment of this loan, water user fee revenues and any other funds legally available from its <br />Utility Fund in an amount sufficient to pay the annual payment due under this contract ("pledged <br />revenues"). Further, the BORROWER agrees to: <br /> <br />Town of Palisade <br /> <br />Page4of11 <br />