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<br />d. The TOWN and the BORRO,.cR to sign a security interest in the reVt;"ues pledged herein in favor of <br />the STATE to secure payment to the STATE; <br /> <br />e. The BORROWER to repay this loan to the STATE. <br /> <br />The TOWN and the BORROWER'S joint resolution is attached hereto as APPENDIX B and incorporated <br />herein by this reference. <br /> <br />7. Warranties. The BORR.JWER and the TOWN warrant the fOllowing: <br /> <br />a. By acceptance of the loan money pursuant to the terms of this contract and by their <br />representation herein, they shall be estopped from asserting for any reason that the BORROWER and <br />the TOWN acting by and through the BORROWER are not authorized or obligated to repay the loan <br />money to the STATE as required by this contract. <br /> <br />b. Both the BORROWER and the TOWN have full power and authority to enter into this contract. The <br />execution and delivery of this contract and the performance and observation of its terms, <br />conditions and obligations have been duly authorized by all necessary actions of the BORROWER and <br />the-ToWN. <br /> <br />c. The BORROWER and the TOWN have not employed or retained any company or person, other than <br />a bona fide employee working solidly for the BORROWER, to solicit or secure this contract and that <br />it has not paid or agreed to pay any person, company, corporation, individual, or firm, other than <br />a bona fide employed, any fee, commission, percentage, gift, or other consideration contingent <br />upon or resulting from the award or the maKing of this contract. <br /> <br />d. That the NORWOOD WATER COMMISSION is an enterprise legally created and maintained in <br />compliance with !i37-4S.1-101, et seq., CRS, and Article X, Section 20 of the Colorado constitution, <br />and has authority to enter into this contract with the STATE. The BORROWER shall immediately notify <br />the STATE in writing if the circumstances WhiCh formulate the basis of this warranty change. <br /> <br />e. That security interests identified in the Coliateral Provisions of this contract are free and clear <br />of all encumbrances wnatever, except the San Miguel Water Conservancy District water <br />revenue bonds, Case No. OS-OS7-0001328716, now held by the General Electric corporation. <br /> <br />f. That the specific revenues to be Pledged to repay the STATE under this contract shall be water <br />user charges and fees, the establishment of which have been authorized by resolution of the <br />BORROWER. The BORROWER hereby pledges sufficient annual revenues to pay the annual installment <br />amount pursuant to the Promissory Note provisions of this contract, and hereby agrees to <br />establish a separate account into which ali such moneys shali be deposited. <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 the amount <br />of not to exceed the MAXIMUM LOAN AMOUNT of $320,000. <br /> <br />b. Interest rate. The interest on this principal amount shall accrue at the rate of two percent <br />(2%) per annum on ali funds advanced to BORROWER during PROJECT construction. <br /> <br />c. Duration. The repayment period of this loan shali be twenty (20) years. <br /> <br />d. Loan payment. If the amount borrowed is the MAXIMUM LOAN AMOUNT, payments would be made <br />in twenty (20) annual instaliments of Nineteen Thousand Five Hundred seventy Dollars and <br />Fifteen Cents ($19,SjJ.1S), which amount is principal and interest. The first installment shali be <br />due and payable on the first day of the month, one year after the STATE declares that the PROJECT <br />has been substantially completed, and yearlY thereafter until the entire principal sum and any <br />accrued interest shall have been paid. Instaliment payments are to be made payable to the CWCB <br />at the address given herein. <br /> <br />NORWOOD WA TEA COMMISSION & TOWN OF NORWOOD <br /> <br />Pag~ 4 of l' Pages <br /> <br />LOAN CONTRACT <br />