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Said general liability insurance shall name the STATE as additional insured. A copy of a certificate of said insurance and an additional insured endorsement must be filed with the STATE. Evidence of current insurance coverage is to be provided as renewals occur. No loan funds shall be advanced by the STATE without evidence of said current coverage. Throughout the life of this contract, the STATE reserves the right to increase the above amount of insurance so that said amounts at a minimum correspond to the amounts established by the Colorado Governmental Immunity Act, now and as hereafter amended. 7. DISTRICT'S and BORROWER'S authority to contract. The DISTRICT and the BORROWER warrant that both the Board of Directors of the DISTRICT and the governing bOdy of the BORROWER have complied with all statutory and other requirements and duly passed resolutions that are irrepealable for the term of this loan contract. authorizing; a. The DISTRICT and the BORROWER to enter into and comply with the terms of this contract with the STATE; b. The BORROWER to establish a Certificate of Deposit account in the amount of one annual loan payment ($50,370,02) and execute an Assignment of Certificate of Deposit as required by the STATE to provide the security specified in the Collateral Provisions of this contract; c. The BORROWER to set rates, fees and charges tel be collected from the DISTRICT for services provided by the BORROWER in an amount sufficient to repaY the annual amounts due under this contract; d. The BORROWER to establish a reserve debt service fund by making an annual deposit equivalent to one-tenth of an annual payment every year for 10 years, and to replenish that fund anytime it is depleted; e. The BORROWER to place money collected from the DISTRICT each year in a special account separate and apart from other BORROWER revenues in an amount sufficient to assure repayment of this loan to the STATE; f. The BORROWER to execute a Security Agreement in accordance with the Pledge of Revenues Provisions of this contract to secure the revenue~ pledged herein in favor of the STATE; and g. The BORROWER to repay this loan to the STATE. Said resolutions are attached hereto as APPENDIX A and incorporated herein. 8. Attorney's opinion letter. Prior to the execution 01 this contract by the STATE, the DISTRICT/BoRROWER shall submit to the STATE a letter from its attorney stating (hat it is the attorney's opinion that the contract will be duly executed by officers of the DISTRICT and the BO~ROWER who are duly elected or appointed and are authorized to execute the contract on behalf of the DISTRICT and the BORROWER and to bind the DISTRICT and the BORROWER; that the DISTRICT'S election on the question of entering into this contract was duly conducted in accordance with the statutes governing the DISTRICT and with its by-laws, and that notice of said election was provided as required by ~ 37-42-112, C.R.S. (1990); that the resolutions of the DISTRICT and the BORROWER authorizing the execution and delivery of the contract were duly adopted by the governing bodies of the DISTRICT and the BORROWER; that there are no provisions in the Colorado Constitution, any state or local law, or the DISTRICT'S by-laws that prevent this contract from binding the DISTRICT and the BORROWER; and that the contract will be valid and binding against the DISTRICT and the BORROWER if entered into by the STATE. 9. 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 STATE to the BORROWER under the terms of this contract, not to exceed f871,oOO. " Orchard Mesa Irrigation District & Mutual Mesa Lateral Enterprise Page 4 of 12 Loan Contract i