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<br />During the time of construction, the STATE reserves the right to increase the above amount of <br />insurance so that said amounts at a minimum correspond to the amount established by the Colorado <br />Governmental Immunity Act, now and as hereafter amended. <br /> <br />5. BORROWER'S indemnification of the STATE. The BORROWER shall, without expense or legal <br />liability to the STATE, manage, operate, and maintain the PROJECT continuously in an efficient and <br />economical manner. The BORROWER agrees to indemnify and hold the STATE harmless from any <br />liability incurred by the STATE as a result of the STATE'S interest in the PROJECT facilities and any other <br />property identified in the Collateral Provisions of this contract. <br /> <br />6. BORROWER'S liability insurance. Upon execution of this contract and continuing until complete <br />repayment of the loan is made to the STATE, the BORROWER shall maintain commercial general liability <br />insurance with a company that is satisfactory to the STATE covering the management, operation, and <br />maintenance of the PROJECT with minimum limits of $ 1 ,000,000 combined single limit for each <br />occurrence and $2,000,000 general aggregate, including products/completed operations and personal <br />Injury. <br /> <br />Sara general liability insurance shall name the STATE as additional insured. A copy{)f a certificate <br />of said insurance and an additional insured endorsement must be filed with the STATE. Evidence of <br />current insurance coverage is to be provided as renewals occur. No loan funds shall be advanced <br />by the STATE without evidence of said current coverage. Throughout the life of this contract, the <br />STATE reserves the right to increase the above amount of insurance so that said amounts at a <br />minimum correspond to the amount established by the Colorado Governmental Immunity Act, now <br />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. Contract for this loan with the STATE, and to pay the indebtedness, and <br /> <br />b. Levy assessments sufficient to pay the annual amounts due under this contract and to <br />establish a reserve debt service fund equivalent to an annual payment within a period of ten (1 a) <br />years, and <br /> <br />c. Place money collected from assessments each year in a special account separate and apart <br />from other BORROWER revenues to assure repayment of this loan to the STATE, and <br /> <br />d. Execute the deed of trust to provide the security as specified in the Collateral Provisions of <br />this contract, and <br /> <br />e. Execute a Security Agreement to secure the revenues pledged hereiri in accordance with the <br />Pledge of Revenues Provisions of this contract. <br /> <br />Such resolutions are attached hereto as Appendix A 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 shareholders <br />and board of directors have validly adopted resolutions approving this contract; that there are no <br /> <br />Vouga Reservoir Association <br /> <br />Page 4 of 1 2 <br /> <br />Loan Contract <br />