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<br />~..~ <br />., <br /> <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 /> <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 /> <br />e. The BORROWER to repay this loan to the STATE. <br /> <br />The BORROWER'S Ordinance No. B16-W and the CITY'S Ordinance No. B15 are attached hereto as <br />APPENDICES C and D and incorporated herein by this reference. <br /> <br />3. Warranties. The BORROWER and/or the CITY warrants the following: <br /> <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 /> <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 /> <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 /> <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 /> <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 /> <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 /> <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 agrees to establish a separate account into <br />which all such moneys shall be deposited. <br /> <br />~ 4. Promissory note provisions. The BORROWER and the CITY understand that this contract is also a <br />promissory note for 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 $5,500,000. <br /> <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 /> <br />CITY OF FORT MORGAN. COLORADO. WATER <br />WORKS AND DISTRIBUTION ENTERPRISE <br /> <br />Page 3 of 10 <br /> <br />LOAN CONTRACT <br />