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<br />described in the Collateral Provisions herein and <br />, <br /> <br />g. To execute a_Security Agreement and an Assignment of Deposit Account as Security to <br />secure the re'i,enues pledged herein in acCordance with the Pledge of Property Provisions of <br />this contract. <br /> <br />Said resolutions are attached hereto as Appendix 1 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 attorney'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 <br />local law that prevent this contract from binding the BORROWER; and that the contract will be valid <br />and 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 up to $500,000 at an interest rate of 4.03% per annum for a <br />term of 20 years is attached as Appendix 2 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 Promissoty 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 <br />BORROWER during construction, interest shall accrue at the rate of 4.03%. The STATE shall <br />calculate the amount of the interest accrued during construction and the BORROWER shall <br />repay that amount to the STATE either within ten (10) days after the date the STATE <br />determines that the PROJECT has been substantially completed, or, at the STATE'S discretion, <br />said interest shall be deducted from the final disbursement of loan funds that the STATE <br />makes to the BORROWER. <br /> <br />c, Final loan amount. In the event that the final loan amount is less than the authorized loan <br />amount, the STATE shall apply the remaining loan funds to prepayment of the loan if the <br />remaining funds equal less than 10% of the authorized loan amount. If the remaining loan <br />funds equal more than 10% of the authorized loan amount, the STATE may apply those <br />funds to prepayment of the loan with the BORROWER'S consent, or the parties may execute <br />a REVISION LETTER as described below to document the final loan amount and reamortize <br />the annual payment. When such remaining loan funds are applied to prepayment of the <br />loan, the annual loan payment amount shall remain the same, resulting in a reduced term <br />of repayment. <br /> <br />10. Changes. The parties may decrease the amount of the loan under this contract or extend the time <br />for completion of the PROJECT through a REVISION LETTER. approved by the State Controller or his <br />designee and the BORROWER, in the form attached hereto as Appendix X. The REVISION LETTER , <br />shall not be valid until approved by the State Controller or such assistant as he may designate. <br />Upon proper execution and approval, the REVISION LETTER shall beccme an amendment to this <br />contract and. except for the Special Provisions of the contract, the REVISION LETTER shall supersede <br />the contract in the event of a conflict between the two. The parties understand and agree that the <br />REVISION LETTER may be used only for decreasing the final loan amount or to extend the time for <br /> <br />North Poudre Irrigation Company <br /> <br />Pag~ 5 of 13 <br /> <br />Loan Contract <br />