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<br />a. Principal amount. The principal amount of the loan shall be the total amount of funds <br />advanced by the STATE to the BORROWER under the terms of this contract, not to exceed the <br />MAXIMUM LOAN AMOUNT of $80,000. <br /> <br />b. Interest rate. The interest on the principal shall accrue at the rate of two percent (2%) per <br />annum on all funds advanced to BORROWER during PROJECT construction. <br /> <br />~&f this loan shall be twenty (20) years. <br /> <br />c. Duration. The rep <br /> <br />d. loan paymeiHeEe~rrQI... ed is the MAXIMUM LOAN AMOUNT, payments would <br />be made in twen a a in 11m. nt,s of Five Thousand Three Hundred Seventy-Seven <br />Dollars and tw -s. nt ,~'26), which is principal and interest. The first <br />installment shall be due and payable on the first day of the month, one year after the month <br />that the STATE declares that the PROJECT has been substantially completed, and yearly <br />thereafter until the entire principal sum and any accrued interest shall have been paid. <br />Installment payments are to be made payable to the CWCB at the address given below. <br /> <br />e. Interest during construction. The BORROWER shall repay to the STATE interest during <br />construction which will be calculated monthly at an equivalent rate of two percent (2%) per <br />annum on each loan advance disbursed to the BORROWER during construction. Said <br />accumulated interest shall be paid to the STATE as a single lump sum on the first day of the <br />month following the month that the STATE declares that the PROJECT has been substantially <br />completed. The actual interest which will accumulate during construction is unknown and <br />cannot be calculated until the conclusion of construction. <br /> <br />f. Prepayment conditions. The BORROWER may prepay all or any of the loan at any time, <br />without penalty. These payments will be applied first to any accrued interest and then to <br />reduce the principal amount. <br /> <br />9. Deed of trust. The security provided for this loan and as evidenced by the executed deed of <br />trust as shown in Appendix B shall be an undivided one hundred percent (100%) interest in the <br />following: <br /> <br />All portions of the Elmwood lateral Ditch beginning near 1234017 1/2 Road, Section <br />5, T1 S, R1 W, Ute Principal Meridian, Mesa County, State of Colorado, and all <br />appurtenant structures thereto. <br /> <br />a. Remedies for default. Upon default in the payments herein set forth to be made by the <br />BORROWER, or default in the performance of any covenantor agreement contained herein, the <br />STATE, at its option, may: <br /> <br />(i) declare the entire principal amount and accrued interest then outstanding <br />immediately due and payable; <br /> <br />(ii) for the account of the BORROWER, incur and pay reasonable expenses for repair, <br />maintenance, and operation of the PROJECT herein described and such expenses as <br />may be necessary to cure the cause of default; <br /> <br />(iii) take possession of the PROJECT, repair, maintain, and operate or lease it; <br /> <br />(iv) act upon the deed of trust, security interest, and promissory note; <br /> <br />ELMWOOD LATERAL DITCH COMPANY <br /> <br />Page 5 of 11 <br /> <br />LOAN CONTRACT <br />