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<br />'.' <br /> <br />~ . <br />," .'\ <br /> <br />law that prevent this contract from binding the BORROWER; and that the contract will be valid and <br />binding against the BORROWER if entered into by the STATE. <br /> <br />9. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment and <br />evidencing this loan in an amount up to $1,600,000 at an interest rate of 4.5% per annum for a <br />term of 30 years is attached as Appendix 2 and incorporated herein. <br /> <br />b. Interest During Construction. As the loan funds are disbursed by the STATE to the <br />BORROWER during construction, interest shall accrue at the rate of 4.5%. The STATE shall <br />calculate the amount of the interest accrued during construction and the BORROWER shall <br />repay that amount to the STATE either within ten (10) days after the date the STATE determines <br />that the PROJECT has been substantially completed, or, at the STATE'S discretion, said interest <br />shall be deducted from the final disbursement of loan funds that the STATE makes to the <br />BORROWER. <br /> <br />c. Final loan amount. In the event that the final loan amount is at least 90% of the <br />AUTHORIZED LOAN AMOUNT, the STATE shall apply the remaining loan funds to prepayment of <br />the loan, which will result in the annual loan payment remaining the same, and the time for <br />repayment of the loan will be reduced. If the final loan amount is less than 90% of the <br />AUTHORIZED LOAN AMOUNT, the STATE may apply those funds to prepayment of the loan with <br />the BORROWER'S consent, or the State and the BORROWER shall execute an amendment <br />that will establish the final loan amount and amend or replace the loan documents that <br />reflect the final loan amount, including the Promissory Note, Security Agreement, Deed of <br />Trust, and Assignment of Certificate of Deposit. <br /> <br />10. Warranties. <br /> <br />a. The BORROWER warrants that, by acceptance of the loan money pursuant to the terms of this <br />contract and by the BORROWER'S representation herein, the BORROWER shall be estopped <br />from asserting for any reason that it is not authorized or obligated to repay the loan money to <br />the STATE as required by this contract. <br /> <br />b. The BORROWER warrants that it has full power and authority to enter into this contract. The <br />execution and delivery of this contract and the performance and observation of its terms, <br />conditions and obligations have been duly authorized by all necessary actions of the <br />BORROWER. <br /> <br />c. The BORROWER warrants that it has not employed or retained any company or person, other <br />than a bona fide employee working solely for the BORROWER, to solicit or secure this contract <br />and has not paid or agreed to pay any person, company, corporation, individual, or firm, other <br />than a bona fide employee, any fee, commission, percentage, gift, or other consideration <br />contingent upon or resulting from the award or the making of this contract. <br /> <br />d. The BORROWER warrants that the property identified in the Collateral Provisions of this <br />contract is not encumbered by any other deeds of trust to or liens of any party other than the <br />STATE or in any other manner. <br /> <br />11. Collateral. Part of the security provided for this loan, as evidenced by the executed Deed of Trust <br />attached as Appendix 3 and incorporated herein, shall be an undivided one hundred percent <br />(100%) interest in all water and water rights available to the Laramie River System of the Tunnel <br />Water Company, pursuant to the decree in Case No. 5993 entered on September 11, 1944, by <br />the District Court, Larimer County, Colorado, together with an easement for the Laramie-Poudre <br />Tunnel. The Laramie-Poudre Tunnel is located on Forest Service lands within Sections 7, 8, 9, <br /> <br />Tunnel Water Company <br /> <br />Page 5 of 12 <br /> <br />Loan Contract <br />