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Said resolution is attached hereto as Appendix A and Incorporated herein. 4. Attorney's Opinion Letter. Prior to the execution of this contract by the STATE, the BORROWER shall submit to the STATE a letter from its attorney stating that it is the attorney's opinion that the person signing for the BORROWER was duly elected or appointed and has authority to sign such documents on behalf of the BORROWER and to bind the BORROWER; that the BORROWER'S board of directors have validly adopted resolutions approving this contract; that there are no provisions in the BORROWER'S decree of incorporation or by-laws or any state or local law that prevent this contract from binding the BORROWER; and that the contract will be valid and binding against the BORROWER if entered into by the STATE. 5. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment and evidencing this debt in the amount of $2,000,000 at an interest rate of 4~% per annum for a period of 20 years, is attached as Appendix B and incorporated herein. 6. Repayment Of Balance Of USBR Loan. Within ten working days of the STATE'S disbursement of loan funds under this contract, the BORROWER shall pay in full any residual balance of the USBR Loan not covered by the proceeds of this loan, and shall provide written confirmation to the STATE that the USBR Loan has been paid in full within five WOrki~YS Of. the BORROWER'S receipt of said confirmation from the USBR. ... '\\1 . c 7. Warranties. t ~ ~."~. a.' The BORROWER warr~nts that by acceptance ~ ~~~oney pursuant to the terms.. of this 'contract and by the BORROWER'S repr~io~~, the BORROWER shall be estopped from asserting for any reason that it is not . 'zed or obligated to repay the loan money to the STATE as required by this contract. b. The BORROWER warrants that 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. The BORROWER warrants that it has not employed or retained any company or person, other than a bona fide employee working solely for the BORROWER, to solicit or secure this contract and has not paid or agreed to pay any person, company, corporation, individual, or firm, other thana bona fide employee, any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the award or the making of this contract. d. The BORROWER warrants that the property identified in the Collateral Provisions of this contract is not encumbered by any other liens of any party other than the STATE or in any other manner. 8. Collateral. Part of the security provided for this loan, as evidenced by the executed Assignment of Certificate of Deposit attached as Appendix C and incorporated herein, shall be an undivided one hundred percent (100%) interest in a certificate of deposit account established by the BORROWER in the amount of $150,000.00, hereinafter referred to as CD ACCOUNT. The STATE shall use the funds contained in the CD ACCOUNT for the purpose of paying principal and interest due under this contract not otherwise paid by the BORROWER. Any amount withdrawn by the STATE for this purpose shall be replenished by the BORROWER within sixty days after such withdrawal. 9. Colla~eral During Repayment. The BORROWER shall not sell, convey, assign,' grant, transfer, mortgage, pledge, encumber, or otherwise dispose of the CD ACCOUNT provided as security for this loan, or any of the revenues pledged to repay the loan herein, so long as any of the principal and any accrued interest on this loan which remain unpaid, without the prior written concurrence of the STATE. Upper Yampa Water Conservancy District Page 3 of 10