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<br />c. To place the assessment revenues pledged to make annual loan payments in a special <br />account separate and apart from other BORROWER revenues in accordance with the Pledge of <br />Property Provisions of this contract and <br /> <br />d. To make annual payments in accordance with the promissory note, and <br /> <br />e. To make annual deposits to a debt service reserve fund in accordance with the Pledge of <br />Property Provisions of this contract, and <br />f. To obtain a certificate of deposit to serve as collateral in the amount of one annual loan <br />payment 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 />g. To execute a Security Agreement and an Assignment of Deposit Account as Security to <br />secure the revenues pledged herein in accordance with the Pledge of Property Provisions of <br />this contract. <br /> <br />Said resolutions are attached hereto as Appendix 1 and incorporated herein. <br /> <br />8. Attorney's Opinion Letter. Prior to the execution of this contract by the STATE, the BORROWER <br />shall submit to the STATE a letter from its attorney stating that it is the attorney's opinion that the <br />person signing for the BORROWER was duly elected or appointed and has authority to sign ,such <br />documents on behalf of the BORROWER and to bind the BORROWER; that the BORROWER'S <br />shareholders and board of directors have validly adopted resolutions approving this contract; that <br />there are no provisions in the BORROWER'S articles of incorporation or by-laws or any state or <br />local law that prevent this contract from binding the BORROWER; and that the contract will be valid <br />and binding against the BORROWER if entered into by the STATE. <br /> <br />9. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment and <br />evidencing this loan in an amount up to $43,000 at an interest rate of 3.75% per annum for a term <br />of 20 years is attached as Appendix 2 and incorporated herein. <br /> <br />a. Interest During Construction. As the loan funds are disbursed by the STATE to the <br />BORROWER during construction, interest shall accrue at the rate of 3.75%. The STATE shall <br />calculate the amount of the interest accrued during construction and the BORROWER shall <br />repay that amount to the STATE either within ten (10) days after the date the STATE <br />determines that the PROJECT has been substantially completed, or, at the STATE'S discretion, <br />said interest shall be deducted from the final disbursement of loan funds that the STATE <br />makes to the BORROWER. <br /> <br />b. Final loan amount. In the event that the final loan amount is at least 90% of the <br />AUTHORIZED LOAN AMOUNT, the STATE shall apply the remaining loan funds to prepayment <br />of the loan, which will result in the annual loan payment remaining the same, and the time <br />for repayment of the loan will be reduced. If the final loan amount is less than 90% of the <br />AUTHORIZED LOAN AMOUNT, the STATE may apply those funds to prepayment of the loan <br />with the BORROWER'S consent, or the State and the BORROWER shall execute an <br />amendment that will establish the final loan amount and amend or replace the loan <br />documents that reflect the final loan amount, including the Promissory Note, Security <br />Agreement, Assignment of Deposit Account as Security, and Assignment of Certificate of <br />Deposit. <br /> <br />10. Warranties. <br /> <br />a. The BORROWER warrants that, by acceptance of the loan money pursuant to the terms of this <br />contract and by the BORROWER'S representation herein, the BORROWER shall be estopped <br />from asserting for any reason that it is not authorized or obligated to repay the loan money to <br />the STATE as required by this contract. <br /> <br />b. The BORROWER warrants that it has full power and authority to enter into this contract. The <br />