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of Property Provisions of this contract, and f. To execute a deed of trust to convey a security interest to the STATE in the property described in the Collateral Provisions herein, and g. To execute a Security Agreement and an Assignment of Deposit Account as Security to secure the revenues pledged herein in accordance with the Pledge of Property Provisions of this contract. Said resolutions are attached hereto as Appendix 1 and incorporated herein. 8. Attorney's Opinion Letter. Prior to the execution of this contract by the STATE. the BORROWER shall submit to the STATE a letter from its attomey stating that it is the attorney's opinion that the person signing for the BORROWER was duly elected or appointed and has authority to sign such documents on behalf of the BORROWER and to bind the BORROWER; that the BORROWER'S shareholders and board of directors have validly adopted resolutions approving this contract; that there are no provisions in the BORROWER'S articles of incorporation or by-laws or any state or local law that prevent this contract from binding the BORROWER; and that the contract will be valid and binding against the BORROWER if entered into by the STATE. 9. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment and evidencing this loan in the amount up to $317,500 at an interest rate of 4.25% per annum for a term of 30 years is attached as Appendix 2 and incorporated herein. a. Interest During Construction. As the loan funds are disbursed by the STATE to the BORROWER during construction, interest shall accrue at the rate of 4.25%. The STATE shall calculate the amount of the interest accrued during construction and the BORROWER shall repay that amount to the STATE either within ten (10) days after the date the STATE determines that the PROJECT has been substantially completed, or, at the STATE'S discretion, said interest shall be deducted from the final disbursement of loan funds that the STATE makes to the BORROWER. b. Final loan amount. In the event that the final loan amount is at least 90% of the AUTHORIZED LOAN AMOUNT, the STATE shall apply the remaining loan funds to reduce the final loan amount and the annual loan payment shall remain the same.. If the final loan amount is less than 90% of the AUTHORIZED LOAN AMOUNT, the STATE may apply the remaining loan funds to reduce the final loan amount with the BORROWER'S consent, or the parties may execute a REVISION LETTER, attached hereto as Appendix 3 and incorporated herein, which shall establish the final loan amount and amend or replace the loan documents that reflect the final loan amount, including the Promissory Note, Security Agreement, Deed of Trust, and Assignment of Certificate of Deposit. 10. Warranties. a. The BORROWER warrants that, by acceptance of the loan money pursuant to the terms of this contract and by the BORROWER'S representation herein, the BORROWER shall be estopped from asserting for any reason that it is not authorized or obligated to repay the Ryan Gulch Reservoir Company Page 5 of 13 Loan Contract