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Loan, the PARTIES agree to amend this contract. <br /> e. Upon substantial completion of the PROJECT with a resulting decrease in <br /> the total LOAN AMOUNT, but not a change in the annual payment, the STATE <br /> may exercise an option and shall provide written notice to the BORROWER <br /> in form substantially equivalent to APPENDIX 2. If exercised, the provisions <br /> of the OPTION LETTER and supporting documentation shall become part of <br /> and be incorporated into this CONTRACT for the total duration of this <br /> CONTRACT. <br /> 4. Interest Prior to Project Completion. As the loan funds are disbursed by the <br /> CWCB to the BORROWER, interest shall accrue on the disbursed funds at the rate <br /> set by the CWCB for this loan. The CWCB shall calculate the amount of the <br /> interest that accrued prior to PROJECT'S substantial completion (as determined by <br /> the CWCB) and notify BORROWER of such amount. The BORROWER shall repay <br /> that amount to the CWCB either within ten (10) days from the date of notification <br /> from the CWCB, or, at the CWCB's discretion, said interest shall be deducted from <br /> the final disbursement of loan funds that the CWCB makes to the BORROWER. <br /> 5. Return of Unused Loan Funds. Any loan funds disbursed but not expended for <br /> the PROJECT in accordance with the terms of this CONTRACT shall be remitted to <br /> the CWCB within 30 calendar days from notification from the CWCB of either (1) <br /> completion of the PROJECT or (2) determination by the CWCB that the PROJECT will <br /> not be completed. Any such loan funds so remitted to CWCB shall be applied to <br /> the principal payment of amounts due on the Loan. <br /> 6. Borrower's Authority to Contract. The BORROWER warrants that it has full power <br /> and authority to enter into this CONTRACT. The execution and delivery of this <br /> CONTRACT and the performance and observation of its terms, conditions and <br /> obligations have been duly authorized by all necessary actions of the BORROWER. <br /> The BORROWER'S AUTHORIZING RESOLUTION (LOAN RESOLUTION) OR ORDINANCE <br /> attached as APPENDIX 4 and incorporated herein. <br /> 7. Bond Counsel's Opinion Letter. Prior to the execution of this CONTRACT by the <br /> CWCB, the BORROWER shall submit to the CWCB a letter from its bond counsel <br /> stating that it is the bond counsel's opinion that: <br /> a. The DISTRICT has full legal right and authority to execute the LOAN DOCUMENTS <br /> and to observe and perform its duties, covenants, obligations and agreements <br /> thereunder. <br /> b. The LOAN DOCUMENTS have been duly authorized, executed and delivered by <br /> authorized officers of the DISTRICT; and, assuming in the case of the LOAN <br /> CONTRACT and the SECURITY AGREEMENT, that the CWCB has all the requisite <br /> power and authority to authorize, execute and deliver, and has duly <br /> authorized, executed and delivered the LOAN CONTRACT and the SECURITY <br /> AGREEMENT, the LOAN DOCUMENTS constitute legal, valid and binding <br /> obligations of the DISTRICT, enforceable in accordance with their respective <br /> terms. <br /> Page 3 of 13 <br />