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<br />law that prevent 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,
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<br />9. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment and
<br />evidencing this loan in an amount up to $30,000 at an interest rate of 3,75% per annum for a
<br />repayment term of 20 years is attached as Appendix 2 and incorporated herein,
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<br />a, Interest During Construetion. 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 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 af1er the date the STATE determines
<br />that the PROJECT has been substantially completed, or, at the STATE'S discretion, said interest
<br />shall be deducted from the final disbursement of loan funds that the STATE makes to the
<br />BORROWER.
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<br />b, Final loan amount. In the event that the final loan amount is at least 90% of the
<br />AUTHORIZED LOAN AMOUNT, the STATE shall apply the remaining loan funds to prepayment of
<br />the loan, which will result in the annual loan payment remaining the same, and the time for
<br />repayment of the loan will be reduced, If the final loan amount is less than 90% of the
<br />AUTHORIZED LOAN AMOUNT, the STATE may apply those funds to prepayment of the loan with
<br />the BORROWER'S consent, or the State and the BORROWER shall amend this contract to
<br />establish the final loan amount and amend or replace the loan documents that reflect the
<br />final loan amount, including the Promissory Note, Security Agreement, Deed of Trust, and
<br />Assignment of Certificate of Deposit.
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<br />10. Warranties.
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<br />a. The BORROWER warrants that, by acceptance of the loan money pursuant to the terms of this
<br />contract and by the BORROWER'S representation herein, the BORROWER shall be estopped
<br />from asserting for any reason that it is not authorized or obligated to repay the loan money to
<br />the STATE as required by this contract.
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<br />b, The BORROWER warrants that it has full power and authority to enter into this contract. The
<br />execution and delivery of this contract and the performance and observation of its terms,
<br />conditions and obligations have been duly authorized by all necessary actions of the
<br />BORROWER,
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<br />c, The BORROWER warrants that it has not employed or retained any company or person, other
<br />than a bona fide employee working solely for the BORROWER, to solicit or secure this contract
<br />and has not paid or agreed to pay any person, company, corporation, individual, or firm, other
<br />than a bona fide employee, any fee, commission, percentage, gift, or other consideration
<br />contingent upon or resulting from the award or the making of this contract.
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<br />d, The BORROWER warrants that the property identified in the Collateral Provisions of this
<br />contract is not encumbered by any other deeds of trust to or liens of any party other than the
<br />STATE or in any other manner,
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<br />11. Collateral. Part of the security provided for this loan, as evidenced by the executed Assignment
<br />of Certificate of Deposit attached as Appendix 3 and incorporated herein, shall be an undivided
<br />one hundred percent (100%) interest in a certificate of deposit account established by the
<br />BORROWER in the amount of one annual loan payment ($2,878,48), hereinafter referred to as CD
<br />ACCOUNT. The STATE shall use the funds contained in the CD ACCOUNT for the purpose of paying,
<br />principal and interest due under this contract not otherwise paid by the BORROWER. Any amount
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<br />Woodchuck Ditch Company
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<br />Loan ContraCt
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