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9. Promissory note provisions. The BORROWER understands thatthis contract is also a promissory note for the repayment of funds loaned according to the terms set forth herein. a. Principal amount. The principal amount of the loan shall be the total amount of funds advanced by the STATE to the BORROWER under the terms of this contract, not to exceed the MAX'MUM LOAN AMOUNT of $301.500. b. Interest rate. The interest on the principal shall accrue at the rate of five percent (5.0%) per annum on all funds advanced to BORROWER. c. Duration. The repayment period of this loan shall be fifteen (15) years. d. Loan payment. Based upon the MAXIMUM LOAN AMOUNT being borrowed, payments would be made in fifteen (15) annual instellments of Twenty-Nine Thousend and Forty-5even Dollars and Twenty Cents($29.047.201. which amount includes principal and interest. The first installmelot shall be due and payable one, year after the STATE determines that the PROJECT has been substantially completed, and yearly thereafteruntil the entire principal sum and any accrued interest shall have been paid. In no event shall the first payment be made any later than June 1, 1998. " Installment payments are to be made payable to the CWCB at the address given below. e. Interest during construction. The BORROWER shall repay to the STATE interest which will be calculated monthly at a rate of five percent (5.0%) per annum on eac ance disbursed to the BORROWER during construction. Said eccumulated interest sha TATE as a single lump sum within ten (10) days thatthe STATE determines e n substantially completed. The actual interest which will accumulate during ru wn and cannot be calculated until the conclusion of construction. h n at any time. without rest and then to reduce the f. Prepayment conditions. The BORR ' penalty. These payments will principal amount. 10. Payment of emergency loan. Upon e tion of s contract, the BORROWER shall make written request of loan funds in the amount necessary to pa ergency Loan #C153694which is dated March 13, 1995. Said requested amount shall include the prin amount of $1 00,500and the interest amount that-has accrued since.the principal was dispersed to the BORROWER. In response to BORROWER'S request, the STATE will transfer the funds requested from the proceeds of this loan to the total loan amount (principal and interest) owing. 11. Collateral. Part of the security provided for this loan, as evidenced by the executed deed of trust attached hereto as APPENDIX C and incorporated herein, shall be an undivided one hundred percent (100%1 interest in the following, hereinafter referred to as SECURITY: Water wells known as A.1, A-2, and A-3, with permit numbers 27993-F, 2B858-F. 27995.F, respectively. together with all equipment. pumps and casing associated with the wells, the land upon which they are located, and all of the water rights owned or leased by the Castle North Metropolitan District andlor the Castle Pines North Metropolitan District Water Activity, Enterprise as decreed in Case No. 84CW061, Water Division 1, on July 21. 1987,as more particularly described in attached deed of trust. 12. Remedies for default. Upon default in the payments herein set forth to be made by the BORROWER, or default in the performance of any covenant or agreement .contained herein, the STATE, at its option, may: a. declare the entire principal amount and accrued interest then outstanding immediately due and payable; b, for the account of the BORROWER, incur and pay reasonable expenses for repair. maintenance, and operation of the PROJECT herein described and such expenses as may be necessary to cure the cause of default; CASTLE PINES NORTH METRO DISTRICT Page 5 of 1.1 LOAN CONTRACT