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<br />'-'-... <br />" <br /> <br />b. Execute the Conditional Assignment of Contract Proceeds as required by the STATE to <br />provide the security specified in the Collateral Provisions of this contract, and <br /> <br />c. Place money collected from assessments and from Pioneer pursuant to the 1987 <br />Agreement each year in a special account separate and apart from other BORROWER <br />revenues in an amount sufficient to assure repayment of this loan to the STATE, and <br /> <br />d. levy annual assessments sufficient to repay the annual amounts due under this <br />contract and establish a reserve debt service fund by making an annual deposit (into the <br />account for the revenues established in the preceding paragraph) equivalent to one-tenth <br />of an annual payment every year for 10 years, and to replenish that fund anytime it is <br />depleted, and <br /> <br />e. Execute Uniform Commercial Code Security Agreements and Financing Statements in <br />accordance with the Pledge of Revenues Provisions of this contract to secure the revenues <br />pledged herein in favor of the STATE. <br /> <br />Such resolutions are attached hereto as APPENDIX A and incorporated herein. <br /> <br />4. Attorney's opinion letter. Prior to the execution of this contract by the STATE, the <br />BORROWER shall submit to the STATE a letter from its attorney stating that it is the attorney's opinion <br />that 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; that the BORROWER'S <br />shareholders and Board of Directors have validly adopted resolutions approving this contract; that <br />there are no provisions in the BORROWER'S articles of incorporation or by-laws or any state or local <br />law that prevent this contract from binding the BORROWER; and that the contract will be valid and <br />binding against the BORROWER if entered into by the STATE. <br /> <br />5. Promissory note provisions. The BORROWER understands 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 <br />advanced by the STATE to the BORROWER under the terms of this contract, not to exceed <br />$45,000. <br /> <br />b. Interest rate. The interest on the principal shall accrue at the rate of four percent (4%) <br />per annum on all funds advanced to BORROWER, <br /> <br />c, Duration. The repayment period of this loan shall be twenty (20) years, <br /> <br />d. loan payment. The payments shall be 20 annual installments of $3,311,18, which <br />amount includes principal and interest. The first installment shall be due and payable one <br />year receipt of the loan funds and annually thereafter until the entire principal sum and any <br />accrued interest shall have been paid, Installment payments are to be made payable to <br />the CWeB at the address given below, <br /> <br />e. Prepayment conditions. The BORROWER may prepay all or any of the loan at any time, <br />without penalty. These payments will be applied first to any accrued interest and then to <br />reduce the principal amount. <br /> <br />f. Collection costs. If the principal or accrued interest under this contract is not paid <br />when due, the BORROWER agrees to pay all reasonable costs of collection, including. <br /> <br />Tremont Mutual Ditch Company <br /> <br />Page 3 of 10 <br /> <br />loan Contract <br />