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<br />- '1 <br /> <br />economical manner. The BORROWER agrees to indemnify and hold the STATE harmless from any <br />liability incurred by the STATE as a result of the STATE'S interest in the PROJECT facilities. <br /> <br />6. BORROWER'S liability insurance. Upon execution of this contract and continuing until complete <br />repayment of the loan is made to the STATE, the BORROWER shall maintain commercial general liability <br />insurance with a company that is satisfactory to the STATE covering the management, operation, and <br />maintenance of the PROJECT with minimum limits of $1,000,000 combined single limit for each <br />occurrence and $ 2,000,000 general aggregate, including productslcompleted operations and personal <br />injury. <br /> <br />Said general liability insurance shall name the STATE as additional insured. A copy of a certificate <br />of said insurance and an additional insured endorsement must be filed with the STATE. Evidence of <br />current insurance coverage is to be provided as renewals occur. No loan funds shall be advanced <br />by the STATE without evidence of said current coverage. Throughout the life of this contract. the <br />STATE reserves the right to increase the above amount of insurance so that said amounts at a <br />minimum correspond to the amounts established by the Colorado Governmental Immunity Act. now <br />and as hereafter amended. <br /> <br />7. BORROWER'S authority to contract. The BORROWER shall, pursuant to its statutory authority, <br />articles of incorporation, and by-laws, have its shareholders and board of directors adopt resolutions. <br />irrepealable during the life of this loan. authorizing the President and Secretary. on behalf of the <br />BORROWER. to do the following: <br /> <br />a. Contract for this loan with the STATE, and to pay the indebtedness. and <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. Levy annual assessments sufficient to repay the annual amounts due under this contract <br />and establish a reserve debt service fund by making an annual deposit 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 />d. Place money collected from assessments and from the sale of recharge water to GASP <br />each year in a special fund separate and apart from other BORROWER revenues in an amount <br />sufficient to assure repayment of this loan to the STATE. 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 />8. Promissory note provisions. The BORROWER understands that this contract is also a promissory <br />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 />$100,000. <br /> <br />b. Interest rate. The interest on the principal shall accrue at the rate of four and one-quarter <br />percent (4 Y. %) per annum on all funds advanced to BORROWER. <br /> <br />South Platte Ditch Company <br /> <br />Page 4 of 11 <br /> <br />Loan Contract <br />