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<br />a. Principal amount. The principal amount of the loan shall be the total amount of funds advanced <br />by the STATE to the BORROWER under the terms of this contract, not to exceed $300,000. <br />b. Interest rate. The interest on the principal shall accrue at the rate of three and three-quarters <br />percent (3o/.!%) per annum on all funds advanced to BORROWER. <br />c. Duration., The repayment period of this loan shall be thirty (30) years. <br />d. Loan payment. The payments shall be 30 annual installments of $16,826.29, which amount <br />includes principal and interest. The first installment shall be due and payable one year after the <br />. STATE determines that the PROJECT has been substantially completed, and annually thereafter <br />until the entire principal sum and any accrued interest shall have been paid. Installment payments <br />are to be made payable to the CWCB at the address given below. <br />e. Interest during construction. The BORROWER shall repay to the STATE interest which will be <br />calculated at the rate'of three-and three-quarters percent (3o/.!%) per annum on each loan advance <br />disbursed to the BORROWER during construction. Said accumulated interest shall be paid to the <br />STATE as a single lump sum ten (10) days after the STATE determines that the PROJECT has been <br />substantially completed, or, at the STATE'S discretion, the amount shall be deducted from the final <br />disbursement of loan funds that the STATE makes to the BORROWER. ' <br />f. Prepayment conditions. The BORROWER mayprepay all or any of the loan at any time, without <br />penalty. These payments will be appliedifirst to any accn~ed interest and then to reduce the <br />principal amount. <br />g. Collection costs. If the principal or accrued interestund~r;this contract is not paid when due, the <br />BORROWER agrees to pay all reasonable costs ofcollectiol1;including r able attorney fees. In <br />the event of any bankruptcy or similarproceedings, costs, of coli 'lude all costs and <br />attomey fees incurred in connection with such proceedin . s of counsel for <br />attendance at meetings of creditors' committees or other <br /> <br /> <br /> <br />10. Warranties. The BORROWER warrants the following: <br />a. By acceptance of the loan money purs the nd bY its representations <br />herein, the BORROWER shall be e ass son that it is not authorized or <br />obligated to repay the loan money t as this contract. <br />b. The BORROWER warrants that it has ower a authority to enter into this contract. The <br />execution and delivery of this cont nd the performance and observation of its terms, <br />conditions and obligations have been du orized by all necessary actions of the BORROWER. <br />c. The BOR'3QWER has not employed or _ ained any company or person, other than a bona fide <br />employee working solely for tt]:e'tBORROWER, to solicit or secure this contract and has not paid or <br />agreed to pay any person, company, corporation, individual, or firm, other than a bona fide <br />employee, any fee, commission, percentage, gift, or other consideration contingent upon or <br />resulting from the awa'rd or the making of this contract. <br />d. The BORROWER warrants that the security identified in the Pledge of Revenues and Collateral <br />Provisions of this contract is not encumbered by any liens of any party other than the STATE or in <br />any other manner. <br /> <br /> <br />11. Pledge of revenues. The BORROWER agrees that the specific revenues to be pledged to repay the <br />STATE shall include, but not be limited to, special assessments levied by the BORROWER as authorized <br />by its resolutions, and any other funds legally available to BORROWER to repay the STATE. <br />a. Revenues for this loan are to be kept separate. The BORROWER hereby irrevocably pledges <br />such special assessment revenues to repay the STATE loan, agrees that these revenues shall be <br />set aside and kept in an account separate from other BORROWER revenues, and warrants that <br />these revenues shall not be used for any other purpose. <br />b. Establish security interest in the revenues. The BORROWER agrees that, in order to provide a <br />security interest to the STATE in the pledged special assessmer:1t revenues so that the STATE shall <br />have priority over all other competing claims for said revenues, it shall provide a properly executed <br />Security Agreement, which is attached as APPENDIX B and incorporated herein. The BORROWER <br /> <br />The Consolidated Extension Canal Company <br /> <br />Page 5 of 11 <br /> <br />Loan Contract <br />