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<br />( '.':1 <br /> <br />parties ag(ee as follows: <br /> <br />A. LOAN PROVISIONS <br /> <br />1. Promissory Note Provisions. The CWCB agrees to loan to the BORROWER an amount not to <br />exceed the LOAN AMOUNT and the BORROWER agrees to repay the loan in accordance with the <br />terms as set forth in the Promissory Note, attached hereto as Appendix 2 and incorporated <br />herein. <br /> <br />2. Application of Grants to Repayment of Loan. Upon receipt of the CRWCD grant of <br />approximately $13,000 and the NRCS grant of approximately $27,000, the BORROWER shall <br />submit the total amount of grant funds to the CWCB to reduce the final loan amount within thirty <br />(30) days of the BORROWER'S receipt of said grant funds. Subsequent to application of the grant <br />funds to the loan, the parties shall enter into a contract amendment establishing the terms of <br />repayment of the final loan amount. <br /> <br />3. Interest Prior to Project Completion. As the loan funds are disbursed by the CWCB to the <br />BORROWER, interest shall accrue at the rate set by the CWCB for this loan. The CWCB shall <br />calculate the amount of the interest that accrued prior to completion of the PROJECT and the <br />BORROWER shall repay that amount to the CWCB either within ten (10) days after the date the <br />CWCB determines that the PROJECT has been substantially completed, or, at the CWCB's <br />discretion, said interest shall be deducted from the final disbursement of loan funds that the <br />CWCB makes to the BORROWER. <br /> <br />4. Return of Unused Loan Funds. Any loan funds disbursed but not expended for the PROJECT in <br />accordance with the terms of this Contract shall be remitted to the CWCB within 30 days of either <br />(1) completion of the PROJECT or (2) upon the determination by the CWCB that the PROJECT will <br />not be completed. <br /> <br />5. BORROWER'S Authority To Contract. The BORROWER'S board of directors and/or stockholders <br />have adopted resolutions, attached as Appendix 3 and incorporated herein: authorizing the <br />BORROWER to perform in accordance with the terms of this contract. <br /> <br />6. Attorney's Opinion Letter. Prior to the execution of this contract by the CWCB, the BORROWER <br />shall submit to the CWCB a letter from its attorney stating that it is the attorney's opinion that <br /> <br />a. the person signing for the BORROWER was duly elected or appointed and has authority to sign <br />such documents on behalf of the BORROWER and to bind the BORROWER; <br /> <br />b. the BORROWER'S board of directors and/or stockholders have validly adopted resolutions <br />approving this contract: <br /> <br />c. there are no provisions in the BORROWER'S articles of incorporation or bylaws or any state or <br />locai law that prevent this contract from binding the BORROWER: and <br /> <br />d. the contract will be valid and binding against the BORROWER if entered into by the CWCB. <br /> <br />7. Pledge Of Property. The BORROWER hereby irrevocably pledges to the CWCB for purposes of <br />repayment of this loan (1) revenues from assessments levied for that purpose as authorized by <br />the BORROWER'S resolution(s) and (2) all of the BORROWER'S rights to receive said assessment <br />revenues, hereinafter collectively referred to as the "Pledged Property." <br /> <br />a. Segregation of Pledged Revenues, The BORROWER hereby agrees to set aside and keep <br /> <br />West Rhone Lateral Ditch Company <br /> <br />Page 2 of 11 <br /> <br />toan Contract <br />