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<br />~ <br /> <br />~. <br /> <br />2. Interest Prior to Project Completion. As the loan funds are disbursed by the CWCB to the <br />BORROWER, interest shall accrue at the rate set by the CWCB for this loan. The CWCB shall <br />calculate the amount of the interest that accrued prior to completion of the PROJECT and the <br />BORROWER shall repay that amount to the CWCB either within ten (10) days after the date the <br />CWCB determines that the PROJECT has been substantially completed, or, at the CWCB's <br />discretion, said interest shall be deducted from the final disbursement of loan funds that the <br />CWCB makes to the BORROWER. <br /> <br />3. Return of Unused Loan Funds. Any loan funds disbursed but not expended for the PROJECT in <br />accordance with the terms of this Contract shall be remitted to the CWCB within 30 days of either <br />(1) completion of the PROJECT or (2) upon the determination by the CWCB that the PROJECT will <br />not be completed. <br /> <br />4. BORROWER'S Authority To Contract. The BORROWER'S board of directors and/or stockholders <br />have adopted resolutions, attached as Appendix 3 and incorporated herein, authorizing the <br />BORROWER to perform in accordance with the terms of this contract. <br /> <br />5. Attorney's Opinion Letter. Prior to the execution of this contract by the CWCB, the BORROWER <br />shall submit to the CWCB a letter from its attorney stating that it is the attorney's opinion that <br /> <br />a. the person signing for the BORROWER was duly elected or appointed and has authority to sign <br />such documents on behalf of the BORROWER and to bind the BORROWER; <br /> <br />b. the BORROWER'S board of directors and/or stockholders have validly adopted resolutions <br />approving this contract; <br /> <br />c. there are no provisions in the BORROWER'S articles of incorporation or bylaws or any state or <br />local law that prevent this contract from binding the BORROWER; and <br /> <br />d. the contract will be valid and binding against the BORROWER if entered into by the CWCB. <br /> <br />6. Pledge Of Property. The BORROWER hereby irrevocably pledges to the CWCB for purposes of <br />repayment of this loan (1) revenues from assessments levied for that purpose as authorized by <br />the BORROWER'S resolution(s) and (2) all of the BORROWER'S rights to receive said assessment <br />revenues, hereinafter collectively referred to as the "Pledged Property." <br /> <br />a. Segregation of Pledged Revenues. The BORROWER hereby agrees to set aside and keep <br />the pledged revenues in an account separate from other BORROWER revenues, and warrants <br />that it shall not use the pledged revenues for any other purpose. <br /> <br />b. Establish Security Interest. The BORROWER agrees that, to provide a security interest to the <br />CWCB in the Pledged Property so that the CWCB shall have priority over all other competing <br />claims for said property, it shall execute a Security Agreement, attached hereto as Appendix <br />4, and incorporated herein. The CWCB shall perfect its security interest in the BORROWER'S <br />right to receive assessment revenues by filing a UCC-1 Form with the Colorado Secretary of <br />State. <br /> <br />c. Assessments For Repayment Of The Loan. Pursuant to its statutory authority, articles of <br />incorporation and bylaws, the BORROWER shall take aU necessary actions consistent therewith <br />to levy assessments sufficient to pay this loan as required by the terms of this contract and the <br />Promissory Note. In the event the assessments levied by the BORROWER become insufficient <br />to assure such repayment to the CWCB, the BORROWER shall immediately take all necessary <br />action consistent with its statutory authority, its articles of incorporation and bylaws including, <br /> <br />North Poudre Irrigation Company <br /> <br />Page 2 of 11 <br /> <br />Loan Contract <br />