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<br />''''\ <br />I <br /> <br />1 O. The CWCB approved at their January 19, 1994. meeting, a loan to the CITY in an amount not to exceed <br />Five Million Five Hundred Thousand Dollars ($5,500,000), hereinafter referred to as MAXIMUM LOAN AMOUNT, at an <br />interest rate of four percent (4%) per annum, and for a duration of forty (40) years; and <br /> <br />11. Pursuant to Chapter 265. Section 1, Colorado Session Laws, 1994 (Senate Bill 94-029), the Colorado <br />General Assembly authorized CWCB to loan to the CITY an amount not to exceed Five Million Five Hundred <br />Thousand Dollars ($5,500,000) for a term of forty (40) years for the construction of the PROJECT. This total amount <br />may be loaned to the CITY acting by and through the BORROWER to enable its participation in the Northern Colorado <br />Water Conservancy District Southern Pipeline Project, phase 2, eastern extension, if the Colorado Water <br />Conservation Board determines, in its sole discretion, that the project and participation of the CITY is technically and <br />financially feasible and that financing through the Colorado Water Resources and Power Development Authority is <br />not available or has been exhausted and establishes appropriate repayment terms; and <br /> <br />12. The CITY'S and/or BORROWER'S participation in the PROJECT will consist of entering into an Allotment <br />Contract with the Northern Colorado Water Conservancy District, attached hereto as APPENDIX B, to provide the <br />loan funds to pay for the CITY'S and/or BORROWER'S proportionate share of the construction costs of the PROJECT. <br />In return. the CITY'S and/or BORROWER is entitled to utilize a certain proportion of the capacity of the pipeline to <br />deliver water to the CITY'S and/or BORROWER'S facilities, and to assign, transfer or lease any part of the CITY'S and/or <br />BORROWER'S allotment of capacity in the pipeline, hereinafter referred to as CONTRACT RIGHTS; and <br /> <br />13. At their March 13, 1995, meeting, the Board made the finding that the project is technically and <br />financially feasible; and <br /> <br />14. The Colorado Water Resources and Power Development Authority has advised the State that any <br />financing available for the City of Fort Morgan for the SWSP Project has been exhausted; and <br /> <br />15. The STATE understands that the repayment of the funds loaned, including interest thereon, will come <br />from revenues pledged for the repayment thereof from water user charges or fees and that this obligation does not <br />constitute a debt of the BORROWER or the CITY within the meaning of any constitutional or statutory limitations; and <br /> <br />16. The parties recogni2e and understand that such water revenues of the CITY have also been pledged for <br />the payment of the Water Revenue Refunding and Improvement Bond, Series 1994, of the BORROWER; and <br /> <br />17. The STATE now desires, by this contract, to loan money to the CITY acting by and through the BORROWER <br />for this PROJECT upon mutually agreeable terms and conditions, subject to the availability of funding for that purpose. <br /> <br />NOW THEREFORE, in consideration of the mutual and dependent covenants contained. it is agreed by <br />the parties as follows: <br /> <br />A. The BORROWER and the CITY agree as follows: <br /> <br />1. Hold STATE harmless. The CITY shall, without expense or legal liability to the STATE. manage, operate, <br />and maintain the PROJECT continuously in an efficient and economical manner. To the extent permitted by law, the <br />BORROWER and the CITY agree to indemnify and hold the STATE harmless from any liability incurred by the STATE as <br />a result of the STATE'S interest in the CONTRACT RIGHTS relating to the PROJECT facilities. <br /> <br />2. Authority to contract. The BORROWER and the CITY warrant that the governing bodies of each have <br />complied with all statutory and other requirements and each have duly passed an ordinance, which shall be <br />irrepealable during the life of this loan. enabling each to do the following: <br /> <br />a. The BORROWER and the CITY to enter into this contract with the STATE; <br /> <br />b. The CITY to fix and collect water user charges and fees sufficient to payoff the loan made under this <br />contract; <br /> <br />CITY OF FORT MORGAN, COLORADO, WATER <br />WORKS AND DISTRIBUTION ENTERPRISE <br /> <br />Page 2 of 10 <br /> <br />LOAN CONTRACT <br />