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l~ 11 / C7/ GvJeJ 1G ~ G4 LULUICCJWH 1 CfCI..UIYJCfCV I z 1JYJJ0 T+GJ f O Iru, rJG f LYVJG ~`/. DOLORES WATER CONSERVANCY DISTRICT )FtE50LUTION N'O.0~-02 RESOLUTION APPROVING ANvIENDMENTS T4 MBIA INC. AGREEIv[ENT TO AD,NST THE SECURITY FOR LOANS C I ~0058A AND C 154193 FROM THE COLORADO WATER CONSERVATION BOARD TO THE DOLORES WATER CONSERVANCY DISTRICT ("DISTRICT'), ACTING BY ANb THROUGI~ TH.E DOLORES WATER CONSERVANC'Y' DISTRICT "WATER ACTIVITY ENTERPRISE W~iEREAS, tl~e Dolores 'Water Conservancy District Water Aetiv.ity .Enterprise (the "Enterprise") is an enterprise vwithin the meaning of C.R.S. § 37-45.1-101 et sew., and Article X, Section 20 of the Colorado Co.nsti~ution, and was established by Resolution No. 93-02 of the District, dated Decom.ber 14, 1993; and WHEREAS, the District, acting by rind through the Enterprise ("Borrower"), executed Loan Contract C 1500SSA with the Colorado Water Conservation Board (the "CWCB") for a loan of up to SS,4Cs1,200, bearing interest at the rate of 3.5% for a term of up to 30 years ("Original Loan Contract"), to finance the irrigation components of the D.istrict's WETPACI~ plan and the pureb.ase of shares of "B" Stock from lvlontezuma ~lall.ey Irrigation Company ("MVIC"), with security as the annuity under the Investment Agreement established by Borrower with MBiA Inc., dated December 5, 2002 ("investment Agreement") and amended September. 1, 2005; and WHEREAS, the District received funds under the Original. Loan Contract to purchase the MViC "B" Stock and construct the Sandstone 'West portion of WETPACK irrigation f acilities a nd a mended O riginal Loan. C antract a s o f S eptember 1, 20 O5, t o reflect a principal. amount not to exceed of $2,530,000 anal added, as additional. security, the pledge of. Borrower's revenues from the Enterprise necessary to assure payment of the a~nnu.al debt service under the Original Loan until such time a,s MBIA .Inc. makes its first payment from the Investment Agreement to the CWCB; and WHEREAS, at tlie same time, Borrower received a second Cu1CB loan, under .Loan Contract C1S0193 ("New Loan Contract"), in at, amount not to exceed 53,323,180 or ninety percent (90%) of the coat of the construction of WETPACK irrigation facilities, in addition to Sandstone, whichever is less, (the "Praject"), a:t an interest rate of 2.5% per azunum for a term of. up to thirty (30) years to fnance the Project, with the security also as the v~vestment Agreement; and. WHEREAS, Borrov~er, norw has the opportunity to provide substituted security Far the Ori.gi.nal and New Loan Contracts with a higher .i.nterest rate tlaan that under the current Investment Agreement by bifurcating the annuity under the Investment Agreement to provide an amended annuity with a higher interest rate as security to pay the Original. Loan and, as substituted security far the New Loan, to provide athree-year, short term loan u~nd.er. a new Investinen.t document with 1~IA Inc. together with a pledge of a ne~vv, long term annuity at 'the l'ermination of the three-year term.