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I .... --".~.~...._---' .... -_.._-~...~~ _...~_.~..~.- .-. ---'--. --'.~ -- . ) {) () 7. Warranties. The BORROWER warrants the following: a, By acceptance of the loan money pursuant to the terms of this contract and by the BORROWER'S representation herein, the BORROWER shall be estopped from asserting for any reason that it is not authorized or obligated to repay the loan money to the STATE as required by this contract. b. It has full power and authority to enter into this contract. The execution and delivery of this contract imd the performance and observation of its terms, conditions and obligations have been duly authorized by all necessary actions of the BORROWER. c. It has not employed or retained any company or person,_other than a bona fide employee working solidly for the BORROWER, to solicit or secure this contract and that it has not paid or agreed to pay any person, company, corporation, individual, or firm, other than a .bona fide employed, any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the award or the making of this contract, d. The Castle Pines North Metropolitan District Water Activity Enterprise is an enterprise lawfully created and maintained incompliance with ~37,45.1-101 et seq., C:;RS, and Article X, Section 20 of the Colorado Constitution and has authority to enter into this contract with the STATE, The BORROWER shall immediately notify the STATE in writing if the circumstances which formulate the basis of this warranty change. 'P e, It will not terminate the Castle Pines N6rtlf1l.letropolitan District Water Activity Enterprise, nor adversely withdraw or deplete its assets, nor otherwise adversely affect the enterprise's ability to perform during the term of this contract. f. The Castle Pines North Metropolitan District and the Castl.e Pines North Metropolitan District Water Activity Enterprise have complied with all statutory and other requirements and duly passed a resolution by their respective Boards; authorizing the BORROWER to enter into this contract with the STATE to .borrow the principal. sum of the loan amount set forth in paragraph 8; to allocate water funds derived from water user fees from existing and future homeowners and all of the infrastructure fees from future home construction sufficient to payoff the loan made under this contract; to set aside sufficient revenues each year to pay the annual installment in a special fund separate and apart from other revenues of the 80RROWER; to sign a security interest in the revenues pledged herein; and to repay this loan to the STATE. The BORROWER'S resolution is attached.hereto as Appendix B and incorporated herein by this reference; The actions of the 80RROWER adopting the resolution~ and executing the security agreements are conditions precedent to performance by the STATE under this contract. g. Specific revenues to be pledged to repay the STATE under this contract shall be water funds derived from water user fees, and infrastructure fees from future home construction, the establishment of which have been authorized by resolution of the BORROWER. The BORROWER hereby pledges sufficient annual revenues to pay the annual installment amount pursuant to paragraph 8 of this contract, and hereby agrees to establish a separate bank account into which all such moneys shall be deposited. 8, 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 ST ATE to the BORROWER under the terms of this contract, not to exceed the MAXIMUM LOAN AMOUNT of $100,500, b. Interest rate. The interest on the principal shall accrue at the rate of five percent (5.0%) per annum on all funds advanced to 80RROWER. c, Duration. The repayment period of this loan shall be within the Borrower's current fiscal year which ends December 31, 1995. CASTLE PINES NORTH METRO DISTRICT Page 4 of 11 LOAN CONTRACT