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<br />,..-.. <br /> <br />f, To execute a Security Agreement to secure the assessment revenues and the BORROWER'S right <br />to receive those revenues pledged herein in accordance with the Pledge of Property Provisions of <br />this contract; and <br /> <br />g. To execute a Security Agreement, Deed of Trust and Stock Assignment to secure the Excelsior <br />Irrigating Company, Shares as specified in the Collateral Provisions of this cOntract. <br /> <br />Said resolutions are attached hereto as Appendix 1 and incorporated herein. <br /> <br />4. Attorney's Opinion Letter. Prior to the execution of this contract by the STATE, the BORROWER shall <br />submit to the STATE a letter from its attomey stating that it is the attomey's opinion that the person <br />signing for the BORROWER was duly elected or appointed and has authority to sign such documents <br />on behalf of the BORROWER and to bind the BORROWER; that the BORROWER'S members and board of <br />directors have validly adopted resolutions approving this contract; that there are no provisions in the <br />BORROWER'S articles of incorporation or by-laws or any state or local law that prevent this contract <br />from binding the BORROWER; and that the contract will be valid and binding against the BORROWER if <br />entered into by the STATE. <br /> <br />5. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment and <br />evidencing this debt in the amount of $590,590 at the interest rate of 3% per annum for a term <br />of forty 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 funds for <br />the Project, the Promissory Note may be adjusted in accordance with the Changes Provisions of <br />this contract. <br /> <br />b. Interest During Construction. As the loan funds are disbursed by the STATE to the BORROWER <br />during PROJECT completion, interest shall accrue at the rate of 3%. The amount of the interest <br />accrued during PROJECT completion shall be calculated by the STATE, and the BORROWER shall <br />repay that amount to the STATE either within ten (10) days after the date the STATE determines <br />that the PROJECT has been substantially completed, or, at the STATE'S discretion, the amount shall <br />be deducted from the final disbursement of loan funds that the STATE makes to the BORROWER. <br /> <br />6. Changes. The STATE may decrease the amount of the loan under this contract or extend the time for <br />completion of the PROJECT through a REVISION LETTER, approved by the State Controller or his <br />designee, in the form attached hereto as Appendix 3. The REVISION LETTER shall not be valid until <br />approved by the State Controller or such assistant as he may designate. Upon proper execution and <br />approval, the REVISION LETTER shall become an amendment to this contract and, except for the <br />Special 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 be used <br />only for decreasing the final loan amount or to extend the time for completion of the PROJECT. <br /> <br />7. Warranties. <br /> <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 from <br />asserting for any reason that it is not authorized or obligated to repay the loan money to the <br />STATE as required by this contract. <br /> <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 BORROWEi'\. <br /> <br />Arkansas Groundwa1er Users Association <br /> <br />Page 3 of 10 <br /> <br />Loan Contract <br />