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<br />efficient and economical manner. The BORROWER agrees to indemnify and hold the <br />STATE harmless from any liability incurred by the STATE as a result of the STATE'S interest <br />in the PROJECT facilities and any other property identified in the Collateral Provisions of <br />this contract. <br /> <br />6. BORROWER'S Liability Insurance, Upon execution of this contract and continuing until <br />complete repayment of the loan is made to the STATE, the BORROWER shall maintain <br />commercial general liability insurance with a company that is satisfactory to the STATE <br />covering the management, operation, and maintenance of the PROJECT with minimum <br />limits of $1,000,000 combined single limit for each occurrence and $2,000,000 general <br />aggregate, including products/completed operations and personal injury. <br /> <br />Said general liability insurance shall name the STATE as additional insured. A copy of a <br />certificate of said insurance and an additional insured endorsement must be filed with the <br />STATE. Evidence of current insurance coverage is to be provided as renewals occur. No <br />loan funds shall be advanced by the STATE without evidence of said current coverage. <br />Throughout the life of this contract, the STATE reserves the right to increase the above <br />amount of insurance so that said amounts at a minimum correspond to the amount <br />established by the Colorado Governmental Immunity Act, now and as hereafter amended. <br /> <br />7. BORROWER'S Authority To Contract. The BORROWER shall, pursuant to its statutory <br />authority, articles of incorporation, and by-laws, have its members and board of directors <br />adopt resolutions, irrepealable during the life of this loan; authorizing the President and <br />Secretary, on 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 />to pay the indebtedness, and <br /> <br />b. To levy water charges and assessments in an amount sufficient to pay the annual <br />amounts due under this contract, and to pledge said water charges and assessment <br />revenues and the BORROWER'S right to receive said revenues from its members for <br />repayment of this loan, in accordance with the Pledge of Property Provisions herein, <br />and <br /> <br />c. To place the revenues from water charges and assessments pledged to make annual <br />loan payments in a special account separate and apart from other BORROWER <br />revenues, in accordance with the PI@dge of Properly 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 <br />Pledge of Properly Provisions of this contract, and <br /> <br />f. To obtain a certificate of deposit to serve as collateral in the amount of one annual <br />loan payment ($11,554.05) as security for the loan, and to execute an assignment of <br />certificate of deposit as described in the Collateral Provisions of this contract, and <br /> <br />g. To execute a Security Agreement and an Assignment of Deposit Account as Security <br />to secure the revenues pledged herein in accordance with the Pledge of Provisions of <br />this contract. <br /> <br />Said resolutions are attached hereto as Appendix A and incorporated herein. <br /> <br />Pinon Mesa Ranches Community Association <br /> <br />Page 4 of 13 <br /> <br />Loan Contract <br />