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<br />WHEREAS. the State has authority to enter this agreement <br />pursuant to sections 37-60-119 and 37-60-122(1). CRS: and <br /> <br />WHEREAS. pursuant to section 37-60-120. the State is <br />required to assure repayment of loan funds DY the Contractor; <br />and <br /> <br />WHEREAS. pursuant to Statute 7-22-101(h). CRS, the <br />Contractor has authority to contract to borroW money provided <br />that a Resolution be duly passed by the Board of Directors and <br />approved by the stockholders and pursuant to its Articles of <br />Incorporation and Bylaws levy assessments assuring repayment of <br />the State accordi~g to the terms of the contract. <br /> <br />NOW, THEREFOR~. in consideration of the mutual and <br />dependent covenants herein contained. it is agreed by the <br />parties hereto as follows: <br /> <br />A. The Contractor agrees that it shall: <br /> <br />1. Use funds loaned by the State for the sole purpose of <br />repurChasing its 6mall project loan obligation from Interior <br />before September l6. 1988. This loan shall not be used by the <br />Contractor for any other purpose. In the event that repurChase <br />is not accomplished by September 16. 1988. the Contractor shall <br />immediately repay this loan amount to the State. <br /> <br />2. Prior to the execution of this contrpct. have its Board <br />of Directors adopt a resolution consistent with 7-22-101(h), <br />CRS. and pursuant to its Articles of Incorpo~ation and Bylaws. <br />authorize the levy of assessments to repay the debt and the <br />execution of security to aSSUre repayment to the State. <br /> <br />3. Without expense to the State. manage. operate. and <br />maintain the project continuously in an effi~ient and <br />economical manner. and assume all legal liability for such <br />management. operation. and maintenance. The Contractor agrees <br />to indemnify and hold the State harmless fro~ any liability as <br />a result of the State's interest in the projFct. <br /> <br />4. Pursuant to its ArticleG of Incorpor~tion and to its <br />Bylaws continue its service charges and levy assessments or <br />adjust as necessarY to provide GUfficient fu~ds for adequate <br />operation and maintenance. emergency repair ~ervices. <br />obsolescence reserves. and debt reserves. an~ to assure the <br />timelY repayment of the project loan to the 9tate as provided <br />herein. . <br /> <br />5. Make the services of said project available within its <br />capacity to all pe~sons in the Contractor1s service area <br />without discrimination as to race. color. religion. or natural <br />origin at reasonable charges (including assessments. taxes. or <br />fees). whether for one or more classes of service. in <br />accordance with a ~chedule of such charges formally adopted by <br />the contractor thrPugh its Board of Directors. as may be <br />modified from time to time. The current rate schedule must be <br />approved by the St~te. Thereafter. the Contractor may. subject <br />to the approval of the State. make such modifications to the <br />rate schedule as tpe Contractor deems necessary to efficiently <br />and economically ptovide for the financial requirements of the <br />system as long as ,he rate schedule remains reasonable and <br />non-discriminatory, <br /> <br />6, Provide the State with such periOdic reports as the <br />State may require ,nd permit periOdic inspections of its <br />operations and accounts by. a designated representative of the <br />State~ <br /> <br />Page 1 of 1 pages <br />