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<br />~ <br />; <br /> <br />"."- <br /> <br />b. Execute the deed of trust as security. required by the STATE as specified in the Deed of Trust <br />Provisions of this contract, and <br /> <br />c. Levy annual assessments sufficient to repay the annual amounts due under this contract, and <br /> <br />d. Place money collected from assessments each year in a special fund separate and apart from other <br />BORROWER revenues to assure repayment of this loan to the STATE, and <br /> <br />e. Sign a security interest in the revenues pledged herein in favor of the STATE to secure the repayment <br />of this loan to the STATE. <br /> <br />Such resolution shall be attached hereto as Appendix A and included herein prior to the STATE'S <br />performance under this contract. <br /> <br />7. Warranties. The BORROWER warrants the following; <br /> <br />a. By acceptance of the loan money pursuant to the terms of this contract and by the BORROWER'S <br />representation herein, the BORROWER shall be estopped from asserting for any reason that it is not <br />authorized or obligated to repay the loan money to the STATE as required by this contract. <br /> <br />b. It has 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. <br /> <br />c. It has not employed or retained any company or person, other than a bona fide employee working <br />solidly for the BORROWER, to solicit or secure this contract and that it has not paid or agreed to pay any <br />person, company, corporation, individual, or firm, other than a bona fide employed, any fee, <br />commission, percentage, gift, or other consideration contingent upon or resulting from the award or <br />the making of this contract. <br /> <br />8. Promissory note provisions. The BORROWER understands that this contract is also a promissory note for <br />the repayment of funds loaned according to the terms set forth herein. <br /> <br />a. Principal amount. The principal amount of the loan shall be the total amount of funds advanced by <br />the STATE to the BORROWER under the terms of this contract, not to exceed the MAXIMUM LOAN AMOUNT <br />of $373,000. <br /> <br />b. Interest rate. The interest on the principal shall accrue at the rate of three percent (3%) per annum <br />on all funds advanced to BORROWER. <br /> <br />c. Duration. The repayment period of this loan shall be forty (40) years. <br /> <br />d. Loan payment. If the amount borrowed is the MAXIMUM LOAN AMOUNT, payments would be made <br />in forty (40) annual installments of Sixteen Thousand One Hundred Thirty-Six Dollars and Eighty-Seven <br />Cents ($16,136.87), which amount includes principal and interest. The first installment shall be due <br />and payable on the first day of the month, one year after the month that the STATE declares that the <br />PROJECT rehabilitation has been substantially completed, and yearly thereafter until the entire principal <br />sum and any accrued interest shall have been paid. Installment payments are to be made payable to <br />the CWCB at the address given below. <br /> <br />e. Interest during construction. The BORROWER shall repay to the STATE interest which will be <br />calculated monthly at an equivalent rate of three percent (3%) per annum on each loan advance <br />disbursed to the BORROWER during construction. Said accumulated interest shall be paid to the STATE <br />as a single lump sum on the first day of the month following the month that the STATE declares that <br /> <br />BEAVER RESERVOIR COMPANY <br /> <br />Page 4 of 11 <br /> <br />LOAN CONTRACT <br />