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Said general liability insurance shall name the STATE as additional insured. A copy of a certificate of said insurance and an additional insured endorsement must be filed with the STATE. Evidence of current insurance coverage is to be provided as renewals occur. 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. 7. BORROWER'S authority to contract. pursuantE't el . eld November 7, 1995 and to its statutory authority, the BORROWER has adopted an ordin h h repealable during the term of this contract, authorizing the Town Administrator and the own er do the following on behalf of the BORROWER: < a. Enter into and comply with the terms of IN,trFlJtLl~; b. Fix and collect water charges and fees sufficient to payoff the loan made under this contract and establish a reserve debt service fund by making an annual deposit equivalent to one-tenth of an annual payment every year for 10 years, and to replenish that fund anytime it is depleted; 'to Set aside sufficient revenues each year to pay the annual installment in a special account, separate and apart from other revenues of the BORROWER; d. Establish a certificate of deposit account in the amount of one annual loan payment as security for the loan, and execute an assignment of certificate of deposit as described in Collateral Provisions of this contract; and e. Sign a security interest in the revenues pledged herein. The BORROWER'S Ordinance is attached hereto as APPENDIX 1 and incorporated herein. 8. 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 contract will be duly executed by officers of the BORROWER who are duly elected or appointed and are authorized to execute the contract and to bind the BORROWER; that the BORROWER'S November 7, 1995 election was duly conducted in compliance with the Colorado Constitution and statutes; that the ordinances of the BORROWER authorizing the execution and delivery of the contract were duly adopted by the BORROWER'S Board of Trustees; that there are no provisions in the Colorado Constitution or any other 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. 9. Promissory note provisions. The BORROWER understands that this contract is also a promissory note for the repayment of funds loaned according to the terms set forth herein. a. Principal amount. The principal amount of the loan shall be the total amount of funds advanced by the STATE to the BORROWER under the terms of this contract, not to exceed $280,500. b. Interest rate. The interest on the principal shall accrue at the rate of five percent (5%) per annum on all funds advanced to the BORROWER. c. Duration. The repayment period of this loan shall be twenty (20) years. d. Loan payment. The payments shall be made in twenty (20) annual installments of Twenty-two Thousand Five Hundred Eight Dollars and Five Cents ($22,508.05), which amount is principal and interest. The first installment shall be due and payable one year after the STATE determines that the PROJECT has been substantially completed, and yearly thereafter until the entire principal sum and any accrued interest shall have been paid. Installment payments shall be made payable to the CWCB at the address given herein. Town of Lyons Page 4 of 1 2 Loan Contract