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a. 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 loan money to the STATE as required by this contract. b. It has full power and authority to enter into this contract. The execution and delivery of this contract and the performance and observation of its terms, conditions and obligations have been duly authorized by all necessary actions of the BORROWER. . C. It has not employed or retained any company or person, other than a bona fide employee working solidly for the BORROWER, to solicit or secure this contract and that it has not paid or agreed to pay any person, company, corporation, individual, or firm, other than a bona fide employed, any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the award or the making of this contract. d . To pledge the full faith and credit of the BORROWER to ensure the repayment of this loan from the STATE. e. That property identified in the Collateral Provisions of this contract is not encumbered by any other deeds of trust or in any other manner. f. That the specific revenues to be pledged to repay the STATE under this contract shall be a use tax, the establishment of which has been authorized by an election of the voters, and revenues received for fees charged to customers to connect to the irrigation system and annual user fees. The BORROWER hereby pledges sufficient annual revenues to pay the annual installment amount pursuant to the Promissory Note provisions of this contract, and hereby agrees to establish a separate account into which all such moneys shall be deposited. 8. Promissory note provisions. The BORROWER understands that this contract is also a promissory note for the repayment of funds loaned according to the terms set forth herein. a. Principal amount. The principal amount of the loan shall be the total amount of funds advanced by the STATE to the BORROWER under the terms of this contract, not to exceed the MAXIMUM LOAN AMOUNT of $400,000. b. Interest rate. The interest on the principal shall accrue at the rate of four percent (4%) per annum on all funds advanced to BORROWER during PROJECT construction. c. Duration. The repayment period of this loan shall be thirty (30) years. d. loan payment. If the amount borrowed is the MAXIMUM LOAN AMOUNT, payments would be made in thirty (30) annual installments of Twenty Three Thousand One Hundred Thirty Two Dollars and four Cents ($23,132.04), which amount is principal and interest. The first installment shall be due and payable on the first day of the month, one year after the month that the STATE declares that the PROJECT has been substantially completed, and yearly thereafter until the entire principal sum and any accrued interest shall have been paid. Installment payments are to be made payable to the cweB at the address given herein. e. Interest during construction. The BORROWER shall repay to the STATE interest during construction which will be calculated at the rate of four percent (4%) per annum on each loan advance disbursed to the BORROWER during construction. The interest accumulated during construction shall be paid to the STATE as a single lump sum on the first day of the month following the month that the STATE declares that the PROJECT has been substantially completed. The actual interest which will accumulate during construction is unknown and cannot be calculated until the conclusion of construction. 1. Prepayment conditions. The BORROWER may prepay all or any of the loan at any time, without penalty. These payments will be applied first to any accrued interest and then to reduce the principal amount. 9. Collateral. The security provided for this loan shall be an undivided one hundred percent ('00%) interest in the following: TOWN OF SILT Page 4 of 9 LOAN CONTRACT