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j . , term of twenty (20) years for financing 75% of PROJECT costs, contingent on an appraisal of the water rights being conducted and on the BORROWER duly approving the pledging of the water rights as collateral for the loan. The CWCB also approved the use of loan funds to refinance a purchase of raw water rights already completed, if approved by the CWC B Executive Director. /. At its May 1998 meeting, the CWCB amended its approval of this loan to allow the BORROWER to apply loan funds to 100% of PROJECT costs, due to the BORROWER'S need to purchase a portion of the water rights sooner than anticipated as part of an agreement with Douglas County, which will purchase the remaining portion of the water rights at a later date. J. Pursuant to House Bill 98-1189, Section 1 (i), the Colorado General Assembly authorized the eWCB to loan Five Hundred Thousand Dollars ($500,000) at an interest rate of 4.75% per annum for a term of twenty (20) years for financing PROJECT costs, and authorized use of the loan funds to refinance PROJECT costs. K. The STATE now desires, by this, contract, to loan money to the BORROWER for this PROJECT upon mutually agreeable terms and conditions, subject to the availability of funding for that purpose. NOW THEREFORE, in consideration of the mutual and dependent covenants contained herein, the parties agree as follows: A. The BORROWER agrees as follows: 1. Time for PROJECT Completion. The BORROWER recognizes that time is of the essence in the performance of all of its obligations under this contract. Therefore, the BORROweR shall finalize the PROJECT water rights purchase(s) within two (2) years of the date of this contract. The time for completion of the PROJECT may be extended subject to the approval of the STATE. The BORROWER must provide, in writing, documented justification for any request for an extension within sixty (60) days prior to the end of the period for completion. 2. BORROWER'S Indemnification of the STATE. The' BORROWER shall, without expense or legal liability to the STATE, manage, operate, and maintain its water system continuously in an efficient and economical manner. The BORROWER agrees to indemnify and hold the STATE harmless from any liability incurred by the STATE as a result of the STATE'S interest in the PROJECT water rights and any other property identified in the Collateral provision of this contract. 3. BORROWER'S Liability Insuranc,e. Upon execution of this contract and continuing until complete repayment of the loan is made to the STATE, the BORROWER shall maintain commercial general liability insurance with a company that is satisfactory to the STATE covering the management, operation, and maintenance of its water system 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 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. The STATE will not disburse any loan funds without evidence of said insurance coverage. Throughout the life of this contract, the STATE reserves the right to increase the Chatfield South Water District Page 2 of 11