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<br />c <br /> <br />right to increase the above amount of insurance so that said amounts at a minimum correspond to the <br />amount established by the Colorado Governmental'lmmunity Act, now and as hereafter amended. <br /> <br />7. BORROWER'S authority to contract. The BORROWER shall, pursuant to its statutory authority, articles <br />of incorporation, and by-laws, have its stockholders and board of directors adopt resolutions, irrepealable <br />during the life of this loan, authorizing the President and Secretary, on behalf of the BORROWER, to do the <br />following: <br /> <br />a. Contract for this loan with the STATE, and to pay the indebtedness, and <br /> <br />b. Levy assessments sufficient to pay the annual amounts due under this contract and to <br />establish a reserve debt service fund equivalent to an annual payment within a period of ten (101 <br />years, and <br /> <br />c. Place money collected from assessments each year for the annual payment and the annual <br />reserve debt service fund payment in a special account separate and apart from other BORROWER <br />revenues to assure repayment of this loan to the STATE, and <br /> <br />d. Obtain a certificate of deposit to serve as collateral in the amount of one annual loan payment <br />($3,081 .23) as security for the loan, and execute an assignment of certificate of deposit as <br />described in the Collateral Provisions of this contract, and <br /> <br />e. Execute a Security Agreement to secure the revenues pledged herein in accordance with the <br />Pledge of Revenues Provisions of this contract. <br /> <br />Such resolutions are attached hereto as Appendix A and incorporated herein. <br /> <br />8. Attorney's opinion letter. Prior to the execution of this contract by the STATE, the BORROWER shall <br />submit to the STATE a letter from its attorney stating that it is the attorney's opinion that the person <br />signing for the BORROWER was duly elected or appointed and has authority to sign such documents on <br />behalf of the BORROWER and to bind the BORROWER; that the BORROWER'S shareholders and board of <br />directors have validly adopted resolutions approving this contract; that there are no provisions in the <br />BORROWER'S articles of incorporation or by-laws or any state or local law that prevent this contract from <br />binding the BORROWER; and that the contract will be valid and binding against the BORROWER if entered into <br />by the STATE. <br /> <br />9. 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 $51,700. <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 />c. Duration. The repayment period of this loan shall be thirty (30) years. <br /> <br />d. Loan payment. The payments shall be 30 annual installments of $3,081.23, which amount <br />includes principal and interest. The first installment shall be due and payable one year after the <br />STATE determines that the PROJECT has been substantially completed, and annually thereafter until <br />the entire principal sum and any accrued interest shall have been paid. Installment payments are <br />to be made payable to the CWCB at the address given below. <br /> <br />Bravo Ditch Company <br /> <br />Page 4 of 11 <br /> <br />Loan Contract <br />