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5. BORROWER'S liability insurance. To the extent permitted by law, the CITY and the BORROWER agree to indemnify and hold the STATE harmless from any liability incurred by the STATE as a result of the STATE'S participation in the PROJECT. Upon execution of this contract and continuing until complete repayment of the loan is made to the STATE, the CITY or the BORROWER shall maintain commercial general liability insurance with a company that is satisfactory to the STATE covering the management, operation, and maintenance of the PROJECT with minimum limits of $1,000,000 combined single limit for each occurrence and $2,000,000 general aggregate, including products/completed operations and personal injury. Said general liability insurance shall name the STATE as additional insured. The CITY or the BORROWER shall provide the STATE with an Acord Form 27 evidencing said insurance and an additional insured endorsement, and shall provide the STATE with documentation of renewals of said insurance. No loan funds shall be advanced by the STATE without evidence of said current coverage. Throughout the life of this contract, the STATE reserves the right to increase the above amount of insurance so that said amounts at a minimum correspond to the amounts established by the Colorado Governmental Immunity Act, now and as hereafter amended. .."1'1'\ B.ecause the CITY and/or the BORROWER ;D ~tity" within the meaning. of the Colorado Governmental Immunity Act, C.'RS~4-10-1~.~'.aS amended ("Act"), the CITY and/or the BORROWER shall at a . es'G~ t ~~ liability insurance, by commercial policy or self-insurance, as I sslFy' meet its liabilities under the Act. The CITY and/or the BORROWER shall vide proof of such insurance prior to the advance of any loan funds. 6. CITY'S and BORROWER'S authority to contract. The CITY and the BORROWER warrant that both the City Council of the CITY and the governing body of the, BORROWER have complied with all statutory and other requirements and have duly passed ordinances, that constitute legislative measures of the CITY and the BORROWER and are irrepealable for the term of this loan contract, authorizing: a. The CITY and the BORROWER to enter into and comply with the terms of this contract with the STATE; b. The CITY to establish and collect water user charges and rates in amounts sufficient to enable the BORROWER to repay the loan made under this contract; c. The BORROWER to make annual loan payments in accordance with the promissory note; d. The BORROWER to pledge revenues from water user charges and rates ("water system revenues") to repay this loan and to execute a Security Agreement to convey a security interest to the STATE in the pledged water system revenues; e. The CITY or the BORROWER to set aside sufficient water system revenues each year to pay the annual installment in a special account, separate and apart from other revenues of the CITY or the BORROWER, in accordance with the Pledge of Revenues provisions of this contract; City of Loveland and City of Loveland, Colorado, Water Enterpriso. Page 5 of 15