C150125 Contract

• Contract/PO #: C150125
• Contractor Name: Surface Creek Ditch & Reservoir Company
• Contract Type: Loan
• Water District: 40
• County: Delta
• Bill Number: MC3
• Loan Projects - Doc Type: Contract Documents

amendment. Any service fee remitted to the CWCB cannot be refunded.

2. Promissory Note Provisions. The CWCB agrees to loan to the BORROWER an amount not
to exceed the LOAN AMOUNT and the BORROWER agrees to repay the loan in accordance with
the terms as set forth in the Promissory Note, attached hereto as Appendix 2 and
incorporated herein. The Promissory Note shall identify the LOAN AMOUNT. If the amount of
loan funds disbursed by the CWCB to the BORROWER differs from the LOAN AMOUNT, the
parties agree to amend this contract to revise the LOAN AMOUNT.

3. Interest Prior to PROJECT Completion. As the loan funds are disbursed by the CWCB to
the BORROWER, interest shall accrue at the rate set by the CWCB for this loan. The CWCB
shall calculate the amount of the interest that accrued prior to substantial completion of the
PROJECT and notify BORROWER of such amount. The BORROWER shall repay that amount to
the CWCS either within ten (10) days from the date of notification from the CWCB, or, at
the CWCB's discretion, said interest shall be deducted from the final disbursement of loan
funds that the CWCB makes to the BORROWER.

4. Return of Unused Loan Funds. Any loan funds disbursed but not expended for the
PROJECT in accordance with the terms of this contract shall be remitted to the CWCB within
30 calendar days from notification from the CWCB of either (1) completion of the PROJECT
or (2) upon the determination by the CWCS that the PROJECT will not be completed.

5. BORROWER'S Authority To Contract. The BORROWER warrants that it has full power and
authority to enter into this contract. The execution and delivery of this contract and the
performance and observation of its terms, conditions and obligations have been duly
authorized by all necessary actions of the BORROWER. The BORROWER'S authorizing
resolution(s) are attached as Appendix 3 and incorporated herein.

6. Attorney's Opinion Letter. Prior to the execution of this contract by the CWCB, the
BORROWER shall submit to the CWCB a letter from its attorney stating that it is the attorney's
opinion that

a. the contract has been duly executed by officers of the BORROWER who are duly elected
or appointed and are authorized to execute the contract and to bind the BORROWER;

b. the resolutions of the BORROWER authorizing the execution and delivery of the contract
were duly adopted by the BORROWER'S board of directors and/or stockholders

c. there are no provisions in the BORROWER'S articles of incorporation or bylaws or any
state or local law that prevent this contract from binding the BORROWER; and

d. the contract will be valid and binding against the BORROWER if entered into by the
CWCB.

7. Pledge Of Property. The BORROWER irrevocably pledges to the CWCB for purposes of
repayment of this loan: (1) revenues from assessments levied for that purpose as
authorized by the BORROWER'S resolution(s) and (2) all of the BORROWER'S rights to receive
said assessment revenues, hereinafter collectively referred to as the "Pledged Property."

a. Segregation of Pledged Revenues. The BORROWER shall set aside and keep the
pledged revenues in an account separate from other BORROWER revenues, and warrants
that these revenues will not be used for any other purpose.

b. Establish Security Interest. The BORROWER has duly executed a Security Agreement,
attached hereto as Appendix 4 and incorporated herein, to provide a security interest to

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