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40 <br /> for augmentation in the spring of 1997. <br /> g P 9 <br /> I. C.R. Evans, the majority stockholder of the BORROWER, has agreed to convey a security interest to <br /> the STATE in certain property owned by him as an individual as part of the security for this loan. In <br /> addition, the Alamosa National Bank has agreed to subordinate its security interest to the CWCB. <br /> J. At its November 25-26, 1996 meeting, the CWCB approved a loan to the BORROWER in an amount <br /> not to exceed $100,000 (approximately 74% of the cost of the PROJECT) at an interest rate of 3.75% <br /> per annum, and for a duration of 30 years. <br /> K. The STATE now desires, by this contract, to loan money to the BORROWER for this PROJECT upon <br /> mutually agreeable terms and conditions. <br /> NOW THEREFORE, in consideration of the mutual and dependent covenants contained, the parties <br /> agree as follows: <br /> A. The BORROWER agrees as follows: <br /> 1. Construction Fund Program procedures. The following items are procedures the BORROWER shall <br /> follow during the construction phase of the PROJECT: <br /> a. The BORROWER shall employ a professional engineer, registered in the State of Colorado, <br /> hereinafter referred to as the CONSULTANT, to prepare plans and specifications for the PROJECT. <br /> b. The agreement between the BORROWER and the CONSULTANT and the plans and specifications <br /> must be submitted to the CWCB staff for verification of compliance with the terms of this contract <br /> prior to bid opening. Any modifications to the plans and specifications must be approved in writing <br /> by the CWCB staff. <br /> c. CWCB staff must be present at bid opening and must approve the award of the construction <br /> contract. <br /> d. The BORROWER shall contract for the construction of the work with responsible and capable firms, <br /> hereinafter referred to as CONSTRUCTION FIRMS, which CONSTRUCTION FIRMS shall be selected by <br /> the BORROWER and found acceptable by the CWCB staff before work under this contract begins. <br /> e. The BORROWER must provide a copy of the executed construction contract documents consisting <br /> of the advertisement for bid, contractor's proposal, construction contract, bid bond, performance <br /> bond, payment bond, notice of award, notice to proceed, sample change order, and sample field <br /> order. After the CWCB staff verifies that these documer is cprr ply with the terms of this contract, <br /> the BORROWER may issue the notice to proceed to the C$OSTRLJ TION FIRM$. <br /> f. The BORROWER shall conduct a pre-construction confer ceat vhibh'firmie the CWCB staff shall <br /> have the opportunity to review and approve the construction schedule. <br /> g. If the CWCB staff determines that the PROJECT requires' rel?fii( nor tl wring construction, <br /> the BORROWER shall employ an inspector who has been.apprdve liy t WCB staff. <br /> h. The BORROWER shall construct the PROJECT in 'accordance with the approved plans and <br /> specifications. <br /> i. Upon completion of the PROJECT construction, the BORROWER shall provide as-built drawings of <br /> the PROJECT to the CWCB staff for approval and filing. <br /> j. Upon completion of the PROJECT construction, the BORROWER shall arrange a final inspection for <br /> the CWCB staff, CONSTRUCTION FIRM, and the CONSULTANT. <br /> 2. Time for PROJECT completion. The BORROWER recognizes that time is of the essence in the <br /> performance of all of its obligations under this contract. Therefore, the BORROWER shall commence <br /> with construction in order to complete the PROJECT no later than one (1) year from the date of this <br /> contract. The time for completion of the PROJECT may be extended subject to the approval of the <br /> The Excelsior Irrigating Company Page 2 of 12 Loan Contract <br />