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I <br /> c. The CITY to set aside sufficient revenues each year to pay the annual installment in an account, separate <br /> and apart from other revenues of the BORROWER and/or the CITY; <br /> d. The BORROWER and the CITY to sign a security interest in the revenues pledged herein in favor of the State <br /> to secure payment to the State; <br /> e. The BORROWER to repay this loan to the STATE. <br /> The BORROWER'S Ordinance No. 816-W and the CITY'S Ordinance No. 815 are attached hereto as <br /> APPENDICES C and D and incorporated herein by this reference. <br /> 3. Warranties. The BORROWER and/or the CITY warrants the following: <br /> a. By acceptance of the loan money pursuant to the terms of this contract and by their representations <br /> herein, the BORROWER and the CITY shall be estopped from asserting for any reason that they are not <br /> authorized or obligated to perform the duties set forth in this contract. <br /> b. They have full power and authority to enter into this contract. The execution and delivery of this <br /> contract and the performance and observation of its terms, conditions and obligations have been duly <br /> authorized by all necessary actions of the BORROWER and the CITY. <br /> C. They have not employed or retained any company or person, other than a bona fide employee <br /> working solidly for the BORROWER or the CITY, to solicit or secure this contract and they have not paid <br /> or agreed to pay any person, company, corporation, individual, or firm,other than a bona fide employed, <br /> any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the <br /> award or the making of this contract. <br /> d. That the BORROWER is an enterprise legally created and maintained in compliance with APPENDIX A <br /> and Article X, Section 20 of the Colorado Constitution, and has authority to enter into this contract with <br /> the STATE. The BORROWER and the CITY shall immediately notify the STATE in writing if the circumstances <br /> which formulate the basis of this warranty change. <br /> e. That security identified in the Collateral Provisions of this contract is not encumbered in any manner <br /> except as set forth in Recital 16. <br /> f. That the BORROWER and the CITY agree not to terminate the BORROWER, nor adversely withdraw or <br /> deplete its right to pledge CITY revenues, nor otherwise adversely affect the BORROWER'S ability to <br /> perform during the term of this contract. <br /> g. That the specific revenues to be pledged to repay the STATE under this contract shall be water user <br /> charges and fees, the establishment of which have been authorized by ordinance of the CITY. The <br /> BORROWER hereby pledges sufficient annual revenues to pay the annual installment amount pursuant to <br /> the Promissory Note provisions of this contract, and hereby a s to establish a separate account into <br /> which all such moneys shall be deposited. <br /> O 4. Promissory note provisions. The BORROWER and ITY un.e 1. / this contract is also a <br /> promissory note for the repayment of funds loaned according t,i t "'7 t: et forth -in. <br /> a. Principal amount. The principal amount of the loan shII t :' it o of funds advanced by <br /> the STATE to the BORROWER under the terms of this contract, not t. AXIMUM LOAN AMOUNT <br /> of $5,500,000. "„ <br /> b. Interest rate. The interest on the principal shall accrue at the rate of four percent (4%) per annum <br /> on all funds advanced to BORROWER during PROJECT construction. <br /> CITY OF FORT MORGAN, COLORADO, WATER <br /> WORKS AND DISTRIBUTION ENTERPRISE Page 3 of 10 LOAN CONTRACT <br />