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<br />e, To make annual deposits to a debt service reserve fund in accordance with the Pledge of <br />Property Provisions of this contract, and <br /> <br />f. To obtain a certificate of deposit to serve as collateral in the amount of one annual loan . <br />payment ($3,084.82) as security for the loan, and execute an assignment of certificate of <br />deposit as described in the Collateral Provisions of this contract, 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 <br />of 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 execution of this contract by the STATE, the <br />BORROWER shall submit to the STATE a letter from its attorney stating that it is the attorney's <br />opinion that the person signing for the BORROWER was duly elected or appointed and has <br />authority to sign such documents on behalf of the BORROWER and to bind the BORROWER; <br />that the BORROWER'S stockholders and board of directors have validly adopted resolutions <br />approving this contract; that there are no provisions in the BORROWER'S articles of <br />incorporation or by-laws or any state or local law that prevent this contract from binding the <br />BORROWER; and that the contract will be VCllid and binding against the BORROWER if entered <br />into by the STATE. <br /> <br />9. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment <br />and evidencing this debt in the amount of $55,000 at the interest rate of 3.75% per annum for <br />a term of thirty years 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, the Promissory Note may be adjusted in <br />accordance 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 construction, interest shall accrue at the rate of 3.75% per annum. The <br />amount of the interest accrued during construction shall be calculated by the STATE and <br />. the BORROWER shall repay that amount to the STATE either within ten (10) days after the <br />date the STATE determines that the PROJECT has been substantially completed, or, at the <br />STATE'S discretion, the amount shall be deducted from the final disbursement of loan <br />funds that the STATE makes to the BORROWER. <br /> <br />10. Changes. The STATE and the BORROWER may decrease the amount of the loan under this <br />contract or extend the time for completion of the PROJECT thrOugh a REVISION LETTER, <br />approved by the State Controller or his designee, and the BORROWER in the form attached <br />hereto as Appendix 3. The REVISION LETfER shall not be valid until approved by the State <br />Controller or such assistant as he may designate. Upon proper execution and approval, the <br />REVISION 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 event of a <br />conflict between the two. The parties understand and agree that the REVISION LETTER may <br />be used only for decreasing the final loan amount or to extend the time for completion of the <br /> <br />The Farmers Independent Ditch Company <br /> <br />Page 5 of 14 <br /> <br />Loan Contract <br />