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<br />, <br />, ' <br /> <br />c. Place money collected from assessments each year in a special fund separate and apart <br />from other BORROWER revenues to assure repayment of this loan to the STATE, and <br /> <br />d. sign a security interest in the revenues pledged herein in favor of the STATE to secure the <br />repayment of this loan to the STATE. <br /> <br />Such resolution shall be attached hereto as APpendix A and included herein prior to the STATE'S <br />performance under this contract. <br /> <br />7. Warranties. The BORROWER warrants the following: <br /> <br />a. By acceptance of the loan money pursuant to the terms of this contract and by the <br />BORROWER'S representation herein, the BORROWER shall be estopped from asserting for any <br />reason that it is not authorized or obligated to repay the loan money to the STATE as <br />required by this contract. <br /> <br />b. It has full power and authority to enter into this contract. The execution and delivery <br />of this contract and the performance and observation of its terms, conditions and <br />obligations have been duly authorized tlY all necessary actions of the BORROWER. <br /> <br />c. It has not employed or retained <lny company or person, other than a bona fide <br />employee working solidly for the BORROWER, to solicit or secure this contract and that it has <br />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 <br />contingent upon or resulting from the <lward or the making of this contract. <br /> <br />8. 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 Linder the terms of this contract. not to exceed the <br />MAXIMUM LOAN AMOUNT of $130,000. <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 BO~ROWER. <br /> <br />c. Duration. The repayment period of this loan shall be thirty (30) years. <br /> <br />d. Loan payment. If the amount borrowed is the MAXIMUM LOAN AMOUNT, payments would <br />be made in thirty (30) annual installments of Seven Thousand Five Hundred Seventeen Dollars <br />& Ninety-One Cents ($7,517.91), which <lmount includes principal and interest. The first <br />installment shall be due and payable on the first day of the month, one year after the <br />month that the STATE declares that the pROJECT has been substantially completed, and yearly <br />thereafter until the entire principal sum and any accrued interest shall have been paid. <br />Installment payments are to be made payable to the CWCB at the address given below. The <br />BORROWER shall apply to the principal amount of this loan the CFSA cost-sharing funds within <br />30 days of receipt of the funds. Then, the remaining principal shall be amortized over a <br />term not greater than the remaining term of this loan. <br /> <br />a. Interest during construction. The flORROWER shall repay to the STATE interest which will <br />be calculated monthly at an equivalent rate of four percent (4%) per annum on each loan <br />advance disbursed to the BORROWER during construction. said accumulated interest shall be <br />paid to the STATE as a single lump sum on the first day of the month following the month <br />that the STATE declares that the PROJECT has been substantially completed. The actual interest <br /> <br />RAINBOW PARK WATER COMPANY <br /> <br />Page 4 of 11 <br /> <br />LOAN CONTRACT <br />