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b. Execute the Conditional Assignment of Contract Proceeds as required by the STATE to <br /> provide the security specified in the Collateral Provisions of this contract, and <br /> c. Place money collected from assessments and from Pioneer pursuant to the 1987 <br /> Agreement each year in a special account separate and apart from other BORROWER <br /> revenues in an amount sufficient to assure repayment of this loan to the STATE, and <br /> d. Levy annual assessments sufficient to repay t - annual amount$ due under this <br /> contract and establish a reserve debt service fund b s' ' nualldeposit (into the <br /> account for-therie ienu s established in the precedi • ; :" a ) Ment to one-tenth <br /> of an a'nnua# pay lent-•every year for 10 year nd to re : fund anytime it is <br /> depleted, and, <br /> e. Execut 'Uhifioni Comaterc ial Code Security Agree t n a g Statements in <br /> accordan x <br /> Y+�4�!#die Pledge of Revenues Provisions of this co r re the revenues <br /> pledged}main in favor of the STATE. <br /> Such resolutions are attached hereto as APPENDIX A and incorporated her in. <br /> 4. 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 attorney stating that it is the attorney's opinion <br /> that the person signing for the BORROWER was duly elected or appointed and has authority to sign <br /> such documents on behalf of the BORROWER and to bind the BORROWER; that rthe 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 ny state or local <br /> law that prevent this contract from binding the BORROWER; and that the contract ill be valid and <br /> binding against the BORROWER if entered into by the STATE. <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 /> a. Principal amount. The principal amount of the loan shall be the total ount of funds <br /> advanced by the STATE to the BORROWER under the terms of this contra t, not to exceed <br /> $45,000. <br /> b. Interest rate. The interest on the principal shall accrue at the rate of f ur percent (4%) <br /> per annum on all funds advanced to BORROWER. <br /> c. Duration. The repayment period of this loan shall be twenty (20) y rs. <br /> d. Loan payment. The payments shall be 20 annual installments of $ ,311.18, which <br /> amount includes principal and interest. The first installment shall be due nd payable one <br /> year receipt of the loan funds and annually thereafter until the entire princ pal sum and any <br /> accrued interest shall have been paid. Installment payments are to be ade payable to <br /> the CWCB at the address given below. <br /> e. Prepayment conditions. The BORROWER may prepay all or any of the an at any time, <br /> without penalty. These payments will be applied first to any accrued int rest and then to <br /> reduce the principal amount. <br /> f. Collection costs. If the principal or accrued interest under this con ract is not paid <br /> when due, the BORROWER agrees to pay all reasonable costs of coil ction, including <br /> Tremont Mutual Ditch Company Page 3 of 10 Loan Contract <br />