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<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 <br />Pledge of Property Provisions of this contract, and <br /> <br />f. To obtain a certificate of deposit to serve as collateral in the amount of $3,000 as <br />security for the loan, and execute an assignment of certificate of deposit as <br />described in the Collateral Provisions of this contract, and <br /> <br />g. To execute a Security Agreement and an Assignment of Deposit Account as <br />Security to secure the revenues pledged herein in accordance with the Pledge of <br />Property Provisions of this contract. <br /> <br />Said resolution is attached hereto as Appendix B and incorporated herein. <br /> <br />5. Attorney's Opinion Letter. Prior to the execution of this contract by the STATE, the <br />BORROWER shall submit to the STATE a letter from its attomey stating that it is the <br />attorney's opinion that the person signing for the BORROWER was duly elected or <br />appointed and has authority to sign such documents on behalf of the BORROWER and <br />to bind the BORROWER; that the BORROWER'S shareholders and board of directors have <br />validly adopted resolutions approving this contract; that there are no provisions in the <br />BORROWER'S articles of incorporation or by-laws or any state or local law that prevent <br />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 />6. Promissory Note Provisions. The Promissory Note setting forth the terms of <br />repayment of this loan in the amount of $25,000 at an interest rate of 4% per annum <br />for a term of 10 years and evidencing this debt is attached as Appendix C and <br />incorporated herein. <br /> <br />a. Revision Of Promissory Note. In the event the Borrower does not use all of the <br />loan funds for the STUDY, the Promissory Note may be adjusted in accordance with <br />the Changes Provisions of this contract. <br /> <br />b. Interest During Study Period. As the loan funds are disbursed by the STATE to <br />the BORROWER during the study period, interest shall accrue at the rate of 4%. The <br />amount of the interest accrued during the study period shall be calculated by the <br />STATE and the BORROWER shall repay that amount to the STATE either within ten <br />(10) days after the date the STATE accepts the completed Feasibility Study, or, at <br />the STATE'S discretion, the amount shall be deducted from the final disbursement <br />of loan funds that the STATE makes to the BORROWER. <br /> <br />7. Changes. The STATE may decrease the amount of the loan under this contract or <br />extend the time for completion of the STUDY through a REVISION LETTER, approved by <br />the State Controller or his designee, in the form attached hereto as Appendix D. The <br />REVISION LETTER shall not be valid until approved by the State Controller or such <br />assistant as he may designate. Upon proper execution and approval, the REVISION <br />LETTER shall become an amendment to this contract and, except for the Special <br />Provisions of the contract, the REVISION LETTER shall supersede the contract in the <br />event of a conflict between the two. The parties understand and agree that the <br /> <br />Feasibility Report loan Contract <br /> <br />Page3of11 <br />