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a. Interest During Construction. As the loan funds are disbursed by the STATE to the BORROWER during construction, interest shall accrue at the rate of 4%. The STATE shall calculate the amount of the interest accrued during construction and the BORROWER shall repay that amount to the STATE either within ten (10) days after the date the STATE determines that the PROJECT has been substantially completed, or, at the STATE'S discretion, said interest shall be deducted from the final disbursement of loan funds that the STATE makes to the BORROWER. b. Final loan amount. In the event that the final loan amount is at least 90% of the AUTHORIZED LOAN AMOUNT, the STATE shall apply the remaining loan funds to prepayment of the loan, which will result in the annual loan payment remaining the same, and the time for repayment of the loan will be reduced. If the final loan amount is less than 90% of the AUTHORIZED LOAN AMOUNT, the STATE may apply those funds to prepayment of the loan with the BORROWER'S consent, or the State and the BORROWER shall execute an amendment that will establish the final loan amount and amend or replace the loan documents that reflect the final loan amount, including the Promissory Note, Security Agreement, Deed of Trust, and Assignment of Certificate of Deposit. 10. Warranties. a. The BORROWER warrants that, 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. The BORROWER warrants that it has full power and authority to enter into this contract. The execution and delivery of this contract and the performance and observation of its terms, conditions and obligations have been duly authorized by all necessary actions of the BORROWER. c. The BORROWER warrants that it has not employed or retained any company or person, other than a bona fide employee working solely for the BORROWER, to solicit or secure this contract and has not paid or agreed to pay any person, company, corporation, individual, or firm, other than a bona fide employee, any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the award or the making of this contract. d. The BORROWER warrants that the property identified in the Collateral Provisions of this contract is not encumbered by any other deeds of trust to or liens of any party other than the STATE or in any other manner. 11. Collateral. Part of the security provided for this loan, as evidenced by the executed Assignment of Certificate of Deposit attached as Appendix 3 and incorporated herein, shall be an un~ivided one hundred percent (100%) interest in a certificate of deposit account established by the BORROWER in the amount of one annual loan payment ($23,421.19), hereinafter referred to as CD ACCOUNT. The STATE shall use the funds contained in the CD ACCOUNT for the purpose of paying principal and interest due under this contract not otherwise paid by the BORROWER. The Borrower shall replenish any amount withdrawn by the State for this purpose within sixty days after such withdrawal. The STATE shall not disburse any loan funds under this contract until the BORROWER has established the CD ACCOUNT. Additional security provided for this loan, as evidenced by the executed Deed of Trust attached as Appendix 4-and incorporated herein, shall be an undivided one hundred percent (100%) interest in the BORROWER'S diversion structure on the South Platte River to be rehabilitated with funds Riverside Reservoir and Land Company Page 5 of 12 Loan Contract C150044