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<br />Said general liability insurance shall name the STATE as additional insured. The BORROWER shaH <br />provide the STATE with a certificate of said insurance and an additional insured endorsement, and <br />shall provide the STATE with documentation of renewals of said insurance. The STATE wiH not <br />disburse any loan funds without evidence of said insurance coverage. Throughout the life of this <br />contract, the STATE reserves the right to increase the above amount of insurance so that said <br />amounts at a minimum correspond to the amount established by the Colorado Governmental <br />Immunity Act, now and as hereafter amended. <br /> <br />7. BORROWER'S Authority To Contract. The BORROWER shall, pursuant to its statutory authority, <br />articles of incorporation and by-laws, have its stockholders and board of directors adopt <br />resolutions, irrepealable during the life of this loan, authorizing the President and Secretary, on <br />behalf of the BORROWER, to do the following: <br /> <br />a. To enter into and comply with the terms of this contract and the promissory note, and <br /> <br />b. To levy assessments in an amount sufficient to pay the annual amounts due under this <br />contract, and to pledge assessment revenues and the BORROWER'S right to receive said <br />revenues for repayment of the loan, and <br /> <br />c. To place the assessment revenues pledged to make annual loan payments in a special <br />account separate and apart from other BORROWER revenues in accordance with the Pledge of <br />Property Provisions of this contract and <br /> <br />d. To make annual payments in accordance with the promissory note, and <br /> <br />e. To make annual deposits to a debt service reserve fund in accordance with the Pledge of <br />Property Provisions of this contract, and <br /> <br />f. To pledge certain property of the Company as collateral for the loan and execute <br />documents necessary to convey a security interest in said property to the CWCB, and <br /> <br />g. To obtain a certificate of deposit to serve as collateral in the amount of one annual loan <br />payment as security for the loan, and execute an assignment of certificate of deposit as <br />described in the Collateral Provisions of this contract, and <br /> <br />h. To execute a Security Agreement and an Assignment of Deposit Account as Security to <br />secure the revenues pledged herein in accordance with the Pledge of Property Provisions of <br />this contract. <br /> <br />Said resolutions are attached hereto as Appendix 1 and incorporated herein. <br /> <br />8. Attorney's Opinion Letter. Prior to the execution of this contract by the STATE, the BORROWER <br />shall submit to the STATE a letter from its attorney stating that it is the attorney's opinion that the <br />person signing for the BORROWER was duly elected or appointed and has authority to sign such <br />documents on behalf of the BORROWER and to bind the BORROWER; that the BORROWER'S <br />shareholders and board of directors have validly adopted resolutions approving this contract; that <br />there are no provisions in the BORROWER'S articles of incorporation or by-laws or any state or local <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 $405,000 at an interest rate of 4% per annum for a term <br />of 30 years is attached as Appendix 2 and incorporated herein. <br /> <br />Riverside Reservoir and Land Company <br /> <br />Page 4 of 12 <br /> <br />Loan Contract C150044 <br />