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<br />~"'-- <br /> <br />BORROWER who are duly elected or appointed and are authorized to execute the contract on <br />behalf of the DISTRICT and the BORROWER and to bind the DISTRICT and the BORROWER; that the <br />resolutions of the DISTRICT and the BORROWER authorizing the execution and delivery of the <br />contract were duly adopted by the governing bodies of the DISTRICT and the BORROWER; that <br />there are no provisions in the Colorado Constitution, any state or local law, or the DISTRICT'S by- <br />laws that prevent this contract from binding the DISTRICT and the BORROWER; and that the <br />contract will be valid and binding against the DISTRICT and the BORROWER if entered into by the <br />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 <br />funds advanced by the STATE to the BORROWER under the terms of this contract, not <br />to exceed $62,500. <br /> <br />b. Interest rate. The interest on the principal shall accrue at the rate of three and <br />one-half percent (3 y, %) 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 $4,397.57, <br />which amount includes principal and interest. The first installment shall be due and <br />payable one year after the STATE defermines that the PROJECT has been substantially <br />completed, and annually thereafter until the entire principal sum and any accrued <br />interest shall have been paid. Installment payments are to be made payable to the <br />CWCB at the address given below. <br /> <br />e. Prepayment conditions. The BORROWER may prepay all or any of the loan at any <br />time, without penalty. These payments will be applied first to any accrued interest <br />and then to 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 />reasonable attorney fees. In the event of any bankruptcy or similar proceedings, <br />costs of collection shall include all costs and attorney fees incurred in connection <br />with such proceedings, including the fees of counsel for attendance at meetings of <br />creditors' committees or other committees. <br /> <br />6. Warranties. The DISTRICT and the BORROWER warrant the following: <br /> <br />a. By acceptance of the loan money pursuant to the terms of this contract and by <br />their representations herein, the DISfRICT and the BORROWER shall be estopped from <br />asserting for any reason that the BoRROWER and the DISTRICT, acting by and through <br />the BORROWER, are not authorized or obligated to repay the loan money to the STATE <br />as required by this contract. <br /> <br />b. Both the DISTRICT and the BORROWER warrant that they have full power and <br />authority to enter into this contract. The execution and delivery of this contract and <br />the performance and observation of its terms, conditions and obligations have been <br />duly authorized by all necessary actions of the DISTRICT and the BORROWER. <br /> <br />Page 4 of 1 2 <br />