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<br />, '~'\ <br />'1 <br /> <br />and personal injury. <br /> <br />Said general liability insurance shall name the STATE as additional insured. The BORROWER shall <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 will 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 resolutions, <br />irrepealable during the life of this loan, authorizing the President and Secretary, on behalf of the <br />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 contract, <br />and to pledge assessment revenues and the BORROWER'S right to receive said revenues for <br />repayment of the loan, and <br /> <br />c. To place the assessment revenues pledged to make annual loan payments in a special account <br />separate and apart from. other BORROWER revenues in accordance with the Pledge of Property <br />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 BORROWER as collateral for the loan including a certificate of <br />deposit in the amount of one annual loan payment and to execute an Assignment of Certificate <br />of Deposit, and any other property of the Company as required by the CWCB and to execute <br />all documents necessary to covey a security interest in said property to the CWCB, and <br /> <br />g. To execute a Security Agreement and an Assignment of Deposit Account as Security to secure <br />the revenues pledged herein in accordance with the Pledge of Property Provisions of this <br />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 the amount of up to $243,700 at an interest rate of 3.5% per annum for a term <br />of 20 years is attached as Appendix 2 and incorporated herein. <br /> <br />Pine River Canal Company <br /> <br />Page 4 of 12 <br /> <br />Loan Contract <br />