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<br />, <br /> <br />e, To make annual deposits to a debt service reserve fund in accordance with the Pledge of <br />Property Provisions herein, <br /> <br />f, To execute a deed of trust to convey a security interest to the STATE in the real property <br />described in the Collateral Provisions of this contract, <br /> <br />g. To execute a Security Agreement and a Conditional Assignment of Contract Proceeds to <br />convey a security interest to the STATE in the BORROWER'S income from the sale of water <br />carried primarily through the Welch Ditch pursuant to Article 10 of the bylaws of the <br />Golden Canal and Reservoir Company, ~nd <br /> <br />h. To execute a Security Agreement and an Assignment of Deposit Account as Security to <br />secure the assessment revenues pledged herein in accordance with the Pledge of <br />Property Provisions 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 BO~ROWER 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 shareholders and bocard 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 10011 law that prevent this contract from binding the <br />BORROWER; and that the contract will be valid 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 up to $300,000 (not to exceed 75% of actual Project <br />costs) at the interest rate of 5.25% per annum for a term of thirty years is attached as <br />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 accordance <br />with the Changes Provisions of this contract. <br /> <br />b. Interest During Construction. As thEl loan funds are disbursed by the STATE to the <br />BORROWER during construction, interest shall accrue at the rate of 5.25% 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, in the form attached hereto as Appendix 3, <br />The 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 LETTER <br /> <br />The Agricultural Ditch and Reservoir Company <br /> <br />Page 5 of 14 <br /> <br />Loan Contract <br />