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<br />agreement, which is incorporated herein by reference, on May 4, 1998 ("Settlement <br />Agreement"). <br /> <br />6. The BORROWER entered into a Water Rights Purchase and Sale Agreement ("Purchase <br />Agreement") with Box Springs and individual shareholders of the Box Springs Canal and <br />Reservoir Company (hereinafter collectivelY referred to as "Box Springs Sellers") on <br />September 30, 1997, for the purchase of the Box Springs Water Rights, and executed two <br />addenda to the Purchase Agreement on February 13, 1998 and April 15, 1998, respectively. <br />The amended Purchase Agreement is incorporated herein by reference. Under the terms of <br />the Purchase Agreement, the BORROWER will acquire the Box Springs Water Rights in two <br />increments, to be conveyed by two separate deeds. The BORROWER will pay for the first <br />increment with his personal funds, and will paY for the second increment using a portion of the <br />proceeds of this loan. <br /> <br />7. At its July 21-22, 1997 meeting, the CWCB approved a loan from the Horse Creek Basin <br />Account to the BORROWER in the amount of $90,000, not to exceed the total cost of the <br />PROJECT, at an interest rate of 4.1 % per annum and for a term of 30 years, to finance the <br />PROJECT, contingent upon the settlement of Case No. 97CW010 and upon the CWCB staff <br />reviewing an appraisal of the Box Springs Water Rights as part of its feasibility determination. <br />At its November 24-25, 1997 meeting, after being informed that the Department of Natural <br />Resources Controller would not authorize a loan to the BqRROWER without General Assembly <br />approval of the loan, the CWCB amended its approval of this loan to provide that the loan <br />shall be from the Small Project Loan Account because such a delay would result in undue <br />hardship on the BORROWER. <br /> <br />8. The STATE has reviewed a feasibility report prepared by HRS Water Consultants, Inc. and an <br />appraisal of the Box Springs Water Rights pnapared by that firm, and, based upon said report <br />and appraisal, the STATE determined the PROJECT to be technically and financially feasible. <br /> <br />9. The STATE and the BORROWER acknowledge and understand that the PROJECT is not a public <br />project and does not involve public works. <br /> <br />NOW THEREFORE, in consideration of the mutual and dependent covenants contained, <br />the parties agree as follows: <br /> <br />A. The BORROWER agrees as follows: <br /> <br />1. Time For PROJECT Completion. The BORROWER recognizes that time is of the essence in the <br />performance of all of its obligations under this contract. Therefore, the BORROWER shall <br />complete the Project transactions no later th;;ln six (6) months from the date of this contract. <br />The time for completion may be extended subject to the approval of the STATE. The <br />BORROWER must provide, in writing, docum6nted justification for any request for extension <br />sixty (60) days prior to the end of the period for completion. <br /> <br />2. BORROWER'S Indemnification of STATE. The BORROWER agrees to indemnify and hold the <br />STATE harmless from any liability incurred by the STATE as a result of the STATE'S interest in <br />the property identified in the Collateral Provisions of this contract. <br /> <br />3. Attorney's Opinion Letter. Prior to the execution of this contract by the STATE, the <br />BORROWER shall submit to the STATE a letter from its attomey stating that it is the attomey's <br />opinion that there are no provisions of any state or local law that prevent this contract from <br /> <br />Rodney J. Preisser <br /> <br />Page 2 of 9 <br /> <br />Loan Contract <br />