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<br />" . <br /> <br />r) <br /> <br />.,,'-',"\ <br /> <br />Company, and execute documents necessary to convey a security interest in said property <br />to the CWCB, and <br /> <br />g. To execute a Security Agreement and an Assignment of Deposit Account as Security to <br />secure the revenues 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 e,.:ecution 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 eleded 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; <br />that there are no provisions in the BORROWER'S articles of incorporation or by-laws or any state <br />or local law that prevent this contract from binding the BORROWER; and that the contract will be <br />valid 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 $560,000 at an interest rate of 4.375% per annum for a <br />term of 3'0 y~ars 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, tlie 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 construdion, interest shall accrue at the rate of 4.375% per annum. The <br />STATE shall calculate the amount of the interest accrued during construction 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 PROJECT has been substantially completed, or, at the STATE'S <br />discretion, said interest shall be deducted from the final disbursement of loan funds that the <br />STATE makes to the BORROWER. <br /> <br />10. Changes. The parties 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 Controller <br />or his designee and the BORROWER, in the form attached hereto as Appendix 3. The REVISION <br />LEITER 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 LEITER shall become an <br />amendment to this contract and, except for the Special Provisions of the contract, the REVISION <br />LEITER shall supersede the contract in the event of a conflict between the two. The parties <br />understand and agree that the REVISION LETTER may be used only for decreasing the final loan <br />amount or to extend the time for completion of the PROJECT. In the event that the parties <br />execute the REVISION LETTER to decrease the amount of the loan, the parties shall amend the <br />Promissory Note and all documents executed by the BORROWER to convey security interests to <br />the STATE as required by this contract to re~ed the decreased loan amount. <br /> <br />11. Warranties. <br /> <br />a. The BORROWER warrants that, by acceptance of the loan money pursuant to the terms of <br /> <br />Left Hand Ditch Company <br /> <br />Page 5 of 13 <br /> <br />Loan Contract <br />