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<br />BORROWER to be used for residential purposes to the municipal interest rate for CWCB <br />loans in effect at the time the use of the property is changed to residential. The <br />BORROWER agrees to immediately notify the STATE of any such change in use of its <br />members' water rights. <br /> <br />10. Changes. The STATE may decrease the amount of the loan under this contract or extend the <br />time for completion of the PROJECT through a REVISION LETTER, approved by the State <br />Controller or his designee, in the form attached hereto as Appendix 3. The REVISION LETTER <br />shall not be valid until approved by the State Controller or such assistant as he may <br />designate. Upon proper execution and approval, the REVISION LETTER shall become an <br />amendment to this contract and, except for the Special Provisions of the contract, the <br />REVISION LETTER shall supersede the contract in the event of a conflict between the two. The <br />parties understand and agree that the REVISION LETTER may be used only for decreasing the <br />final loan amount or to extend the time for completion of the PROJECT. In the event that the <br />parties execute the REVISION LETTER to decrease the amount of the loan, the parties shall <br />amend the Promissory Note and all documents executed by the BORROWER to convey <br />security interests to the STATE as required by this contract to reflect the decreased loan <br />amount. <br /> <br />11. Warranties. <br /> <br />a. The BORROWER warrants that by acceptance of the loan money pursuant to the terms of <br />this contract and by the BORROWER'S representation herein, the BORROWER shall be <br />estopped from asserting for any reason that it is not authorized or obligated to repay the <br />loan money to the STATE as required by this contract. <br /> <br />b. The BORROWER warrants that it has full power and authority to enter into this contract. <br />The execution and delivery of this contract and the performance and observation of its <br />terms, conditions and obligations have been duly authorized by all necessary actions of <br />the BORROWER. <br /> <br />c. The BORROWER warrants that it has not employed or retained any company or person, <br />other than a bona fide employee working solely for the BORROWER, to solicit or secure <br />this contract and has not paid or agreed to pay any person, company, corporation, <br />individual, or firm, other than a bona fide employee, any fee, commission, percentage, <br />gift, or other consideration contingent upon or resulting from the award or the making of <br />this contract. <br /> <br />d. The BORROWER warrants that the property identified in the Collateral Provisions of this <br />contract is not encumbered by any other liens or in any other manner. <br /> <br />12. Collateral. Part of the security provided for this loan, as evidenced by the executed <br />Assignment of Certificate of Deposit attached as Appendix 4 and incorporated herein, shall <br />be an undivided one hundred percent (100%) interest in a certificate of deposit account <br />established by the BORROWER in the amount of one annual loan payment ($3,365.26), <br />hereinafter referred to as CD ACCOUNT. The STATE shall use the funds contained in the CD <br />ACCOUNT for the purpose of paying principal and interest due under this contract not <br />otherwise paid by the BORROWER. Any amount withdrawn by the STATE for this purpose shall <br /> <br />Chipperfield Lane Ditch, Inc. <br /> <br />Page 6 of 14 <br /> <br />Loan Contract <br />