PROJC00781

• Contract/PO #: C153708
• Contractor Name: Appleton ML 350 Ditch Company, Inc.
• Contract Type: Loan
• Water District: 72
• County: Mesa
• Bill Number: HB 95-1155
• Loan Projects - Doc Type: Contract Documents

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6. BORROWER'S authority to contract. The BORROWER shall, pursuant to its articles of
incorporation, by-laws, and statutory authority, have a majority of its shareholders (or, if the
shareholders fail to make or authorize an increase in assessments, its Board of Directors) approve the
assessment of the stock in order to make the loan payment as described in the Promissory Note
Provisions, and to fulfill conditions as listed in the Pledge of Revenue Provisions of this contract, and
have its Board of Directors adopt a resolution, approved by the shareholders, authorizing the President
and Secretary, on behalf of the BORROWER, to do the following:

a. Contract for this loan with the STATE, and to pay the indebtedness, and

b. Execute the deed of trust as security required by the STATE as specified in the Security
Provisions of this contract, and

c. Levy assessments sufficient to repay the annual amounts due under this contract, and

d. Place money collected from assessments in a special account, separate and apart from
other BORROWER revenues to assure repayment of this loan to the STATE, and

e. Sign a security interest in the revenues pledged herein in favor of the STATE to secure
the repayment of this loan to the STATE.

Such resolutions, which shall be irrepealable during the life of the loan, shall be attached hereto
as Appendix A and incorporated herein prior to the STATE'S performance under this contract.

7. Warranties. The BORROWER warrants the following:

a. By acceptance of the loan money pursuant to the terms of this contract and by the
BORROWER'S representations 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. The BORROWER 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. The BORROWER 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
has not paid or agreea to pay any person, company, corporation, indlviaual, 01 firm, UlI ,'"
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. That the real property identified in the Security Provisions of this contract is not
encumbered by any other deeds of trust to any party other than the STATE or in any other
manner.

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.

APPLETON ML350 DITCH COMPANY, INC. LOAN CONTRACT

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