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I.,; .J c. Levy annual assessments sufficient to repay the annual amounts due under this contract, and d. Place money collected from assessments each year in a special fund 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 resolution shall be attached hereto as Appendix A and included 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 representation 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. It 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. It 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 that it has not paid or agreed to pay any person, company, corporation, individual, or firm, other 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. 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. a. Principal amount. The principal amount of the loan shall be the total amount of funds advanced by the STATE to the BORROWER under the terms of this contract, not to exceed the MAXIMUM LOAN AMOUNT of $30,000. b, Interest rate. The interest on the principal shall accrue at the rate of four percent (4%) per annum on all funds advanced to BORROWER during PROJECT construction, c. Duration. The repayment period of this loan shall be thirty (30) years. d. Loan payment. If the amount borrowed is the MAXIMUM LOAN AMOUNT. payments would be made in thirty (30) annual installments of One Thousand Seven Hundred Thirty.Four Dollars and Ninety Cents ($1,734.90), which amount includes prinCipal and interest. The first installment shall be due and payable on the first day of the month, one year after the month that the STATE declares that the PROJECT has been substantially completed, and yearly thereafter until the entire principal sum and any accrued interest shall have been paid. Installment payments are to be made payable to the CWCBat the address given below. e, Interest during construction. The BORROWER shall repay to the STATE interest during construction which will be calculated monthly at an equivalent rate of four percent (4%1 per annum on each loan advance disbursed to the BORROWER during construction, Said accumulated interest shall be paid to the STATE as a single lump sum on the first day of the month following the month that the STATE declares that the PROJECT has been substantially completed. The actual interest which will accumulate during construction is unknown and cannot be calculated until the conclusion of construction. MILITARY PARK RESERVOIR COMPANY Page 4 of 11 LOAN CONTRACT