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."....... a. The BORROWER to obtain a certificate of deposit to serve as collateral in the amount of one annual loan payment ($5,783.01) as security for the loan, and execute an assignment of certificate of deposit as described in the Collateral Provisions of this contract. Said resolutions are attached hereto as Appendix A and incorporated herein. 8. Attorney's opinion letter. Prior to the execution of this contract by the STATE, the DISTRICT and the BORROWER shall submit to the STATE an opinion from bond counsel that the contract will be duly executed by officers of the DISTRICT and BORROWER who are duly elected or appointed and are authorized to execute the contract and to bind the DISTRICT and BORROWER; that the resolutions of the DISTRICT and BORROWER authorizing the execution and delivery of the contract were duly adopted by the goveming bodies of the DISTRICT and BORROWER; that there are no provisions in the Colorado Constitution or any other state or local law that prevent this contract from binding the DISTRICT and BORROWER; and that the contract will be valid and binding against the DISTRICT and BORROWER if entered into by the STATE. 9. Promissory Note Provisions. The Promissory Note setting forth the terms of repayment and evidencing this debt in the amount of up to $100,000 at an interest rate of 4% per annum for a term of thirty (30) years is attached as Appendix B and incorporated herein. a. 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 reduce the final loan amount and the annual loan payment shall remain the same. If the final loan amount is less than 90% AUTHORIZED LOAN AMOUNT, the State may apply those funds to reduce the final loan amount with the BORROWER'S consent, or the STATE and the BORROWER shall execute a REVISION LETTER, attached hereto as Appendix C and incorporated herein, which will establish the final loan amount and amend or replace the loan documents that reflect the final loan amount, including the Promissory Note, the Security Agreement and the Assignment of Certificate of Deposit. b. Interest During Construction. As the loan funds are disbursed by the STATE to the BORROWER during PROJECT completion, interest shall accrue at the rate of 4% per annum. The STATE shall calculate the amount of the interest accrued during PROJECT completion and shall bill the BORROWER annually from the date of first disbursement and upon completion of the PROJECT. The BORROWER shall pay the interest during construction within ten (10) days after receipt of said bill. 10. Warranties. The DISTRICT and the BORROWER warrant the following: a. By acceptance of the loan money pursuant to the terms of this contract and by its representations herein, the BORROWER shall be estopped from asserting for any reason that the BORROWER is not authorized or obligated to repay the loan money to the STATE as required by this contract. b. The DISTRICT and the BORROWER have 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 DISTRICT and the BORROWER. c. The DISTRICT and the BORROWER have not employed or retained any company or person, other than a bona fide employee working solely for the DISTRICT and the BORROWER, to solicit or secure this contract. The DISTRICT and the BORROWER have not paid or agreed to pay any person, company, corporation, individual, or firm, other than a bona fide employee, any fee, Silt Water Conservancy District Water Activity Enterprise and Silt Water Conservancy District Page 5 of 13