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~ ~ DOLORES WATER CONSERVANCY DISTRICT WATER ACTIVITY ENTERPRISE RESOLUTION NO. 05-02-E RESOLUTION APPROVING LOAN CONTRACT FOR A LOAN OF UP TO $3,323,180 FROM THE COLORADO WATER CONSERVATION BOARD TO THE DOLORES WATER CONSERVANCY DISTRICT, ACTING BY AND THROUGH THE DOLORES WATER CONSERVANCY DISTRICT WATER ACTIVITY ENTERPRISE, FOR A PORTION OF THE IRRIGATION CO T OF THE DISTRICT'S WETPACK PROJECT, WHICH INC ES CON R TION OF WATER SUPPL RASTR TURE .., WHEREAS, Do res Wate Conse ancy Di t(the "District") is a water conservancy district esta ' ed pursuan d governed by Colorado statute, C.R.S. § 37-45.1-101, et se ., to co serve and develop the water resources of the Dolores River and its tributaries in Southwest Colorado; and WHEREAS, the Dolores Water Conservancy District Water Activity Enterprise (the "Enterprise") is an enterprise within the meaning of C.R.S. § 37-45.1-101 et seg., and Article X, Section 20 of the Colorado Constitution, and was established by Resolution No. 93-02 of the District, dated December 14, 1993; and WHEREAS, the District, acting by and through the Enterprise (`Borrower"), executed Loan Contract C150058A with the Colorado Water Conservation Board (the "CWCB") for a loan of up to $5,461,200, bearing interest at the rate of 3.5% for a term of up to 30 years, to finance the costs of the irrigation components of the District's WETPACK plan, and of the purchase of shares of "B" Stock from Montezuma Valley Irrigation Company ("MVIC"); and WHEREAS, the District received funds under Loan Contract C150058A to purchase t he M VIC " B" S tock a nd c onstruct t he S andstone W est p ortion o f t he ne w WETPACK irrigation facilities; and WHEREAS, at its January 26, 2005, meeting, the CWCB approved a second loan to Borrower under Loan Contract C 150193, in an amount not to exceed $3,323,180 or ninety percent (90%) of the cost of the construction of additional WETPACK irrigation facilities, whichever is less, (the "Project"), at an interest rate of 2.5% per annum for a term of up to thirty (30) years (the "Loan") to finance the Project, with security as the annuity under the Investment Agreement established by Borrower with MBIA Inc., dated December 5, 2002 ("Investment Agreement"), which also serves as security for the loan under Contract C150058A; and WHEREAS, Borrower, now desires to borrow up to $3,323,180 for the Project upon the terms and conditions included in Loan Contract C150193 and its appendices ("Loan Contract"). This document is incorporated into the contract by reference. 1