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<br />::'~ <br /> <br />7. BORROWER'S Authority To Contract. The BORROWER shall, pursuant to its statutory authority, <br />articles of incorporation and by-laws, have its stockholders and board of directors adopt resolutions, <br />irrepealable during the life of this loan, authorizing the President and Secretary, on behalf of the <br />BORROWER, to do the following: <br /> <br />a. To enter into and comply with the terms of this contract and the promissory note, and <br /> <br />b. To levy assessments in an amount sufficient to pay the annual amounts due under this contract, <br />and to pledge assessment revenues and the BORROWER'S right to receive said revenues for <br />repayment of the loan, and <br /> <br />c. To place the assessment revenues pledged to make annual loan payments in a special account <br />separate and apart from other BORROWER revenues in accordance with the Pledge of Property <br />Provisions of this contract and <br /> <br />) i <br /> <br />\~ <br /> <br />" <br /> <br />. <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 /> <br />f. To obtain a certificate of deposit to serve as collateral in the amount of one annual loan payment <br />as security for the loan, and execute an assignment of certificate of deposit as described in the <br />Collateral Provisions of this contract, and <br /> <br />g. To execute a Security Agreement and an Assignment of Deposit Account as Security to secure <br />the revenues pledged herein in accordance with the Pledge of Property Provisions of this <br />contract. <br /> <br />Said resolutions are attached hereto as Appendix X 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 attomey'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 local <br />law that prevent this contract from binding the BORROWER; and that the contract will be valid and <br />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 the amount of X at an interest rate of X per annum for a term of X years is <br />attached as Appendix X and incorporated herein. <br /> <br />a. Revision Of Promissory Note. In the event the Borrower does not use all of the loan funds for <br />construction of the Project, the Promissory Note may be adjusted in accordance with the <br />Changes Provisions of this contract. <br /> <br />b. Interest During Construction. As the loan funds are disbursed by the STATE to the BORROWER <br />during construction, interest shall accrue at the rate of X%. The STATE shall calculate the amount <br />of the interest accrued during construction and the BORROWER shall repay that amount to the <br />STATE either within ten (10) days after the date the STATE determines that the PROJECT has been <br />substantially completed, or, at the STATE'S discretion, said interest shall be deducted from the <br />final disbursement of loan funds thatthe STATE makes to the BORROWER. . <br /> <br />Page 4 of 12 <br /> <br />. <br />