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<br />,- "- <br />. ., <br /> <br />approving this contract; that there are no prOVISions in the BORROWER'S articles of <br />incorporation or by-laws or any state or local law that prevent this contract from binding the <br />BORROWER; and that the contract will be valid and binding against the BORROWER if entered <br />into by the STATE. <br /> <br />9. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment <br />and evidencing this debt in the amount of $120,000 at the interest rate of 3.75% per annum <br />for a term of thirty 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 <br />funds for construction of the Project, the Promissory Note may be adjusted in accordance <br />with the 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 3.75%. The amount of <br />the interest accrued during construction shall be calculated by the STATE and the <br />BORROWER shall repay that amount to the STATE either within ten (10) days after the date <br />the STATE determines that the PROJECf has been substantially completed, or, at the <br />STATE'S discretion, the amount shall be deducted from the final disbursement of loan <br />funds that the STATE makes to the BORROWER. <br /> <br />10. Changes. The STATE may decrease the amount of the loan under this contract or extend the <br />time for completion of the PROJECT through a REVISION LETTER, approved by the State <br />Controller or his designee, in the form attached hereto as Appendix 3. The REVISION LETTER <br />shall not be valid until approved by the State Controller or such assistant as he may <br />designate. Upon proper execution and approval, the REVISION LETTER shall become an <br />amendment to this contract and, except for the SpeCial Provisions of the contract, the <br />REVISION LETTER shall supersede the contrac:tin the event of a conflict between the two. The <br />parties understand and agree that the REViSiON LETTER may be used only for decreasing the <br />final loan amount or to extend the time for completion of the PROJECT. In the event that the <br />parties execute the REVISION LETTER to decrease the amount of the loan, the parties shall <br />amend the Promissory Note and all documents executed by the BORROWER to convey <br />security interests to the STATE as required by this contract to reflect the decreased loan <br />amount. <br /> <br />11. Warranties. <br /> <br />a. The BORROWER warrants that by acceptance of the loan money pursuant to the terms of <br />this contract and by the BORROWER'S representation herein, the BORROWER shall be <br />estopped from asserting for any reason that it is not authorized or obligated to repay the <br />loan money to the STATE as required by this contract. <br /> <br />b. The BORROWER warrants that it has full power and authority to enter into this contract. <br />The execution and delivery of this contract and the performance and observation of its <br />terms, conditions and obligations have been duly authorized by all necessary actions of <br />the BORROWER. <br /> <br />c. The BORROWER warrants that it has not employed or retained any company or person, <br />other than a bona fide employee working solely for the BORROWER, to solicit or secure <br />this contract and has not paid or agreed to pay any person, company, corporation, <br /> <br />The DurkeeDitch Company, Inc. <br /> <br />Page 5 of 13 <br /> <br />Loan Contract. <br />