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<br />7 _ Warranties. The BORROWER warrants the following:
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<br />a. By acceptance of the loan 'money pursuant to the terms of this contract and by the BORROWER'S
<br />representation herein, the BORROWER shall be estopped from asserting for any reason that it is not authorized
<br />or obligated to repay the loan money to the STATE as required by this contract.
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<br />b. It has full power and authority to enter into this contract, The execution and delivery of this contract
<br />and the performance and observation of its terms, conditions and obligations have been duly authorized by
<br />all necessary actions of the BORROWER,
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<br />c. It has not employed or retained any company or person, other than a bona fide employee working solidly
<br />for the BORROWER, to solicit or secure this contract and that it has not paid or agreed to pay any person,
<br />company, corporation, individual, or firm, other than a bona fide employed, any fee, commission,
<br />,percentage, gift, or other consideration contingent upon o,r resulting from the award or the making of this
<br />contract.
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<br />B. PromissorY note provisions. The BORROWER understands that this contract is also a promissory note for the
<br />repaYlllent of funds loaned according to the terms set forth herein,
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<br />a.' Principal amount. The principal amount of the loan shall bethe total amount of funds advanced by the
<br />STATE to the BORROWER under the terms of this contract,not to exceed the MAXIMUM LOAN AMOUNT of
<br />$97,500.
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<br />b. Interest rate. The interest on the principal shall accrue at the rate of five percent (5%) per annum on
<br />all funds advanced to BORROWER. '
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<br />c. Duration. The repayment period of this loan shall be twenty (20) years,
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<br />d. Loan payment. If the amount borrowed is the MAXIMUM LOAN AMOUNT, payments would be made in
<br />twenty (20) annual installments of Seven Thousand Eight Hundred Twenty~ Three Dollars and Sixty-Five
<br />Cents ($7.823.651, which amount includes principal and interes,t. The first installment shall be due and
<br />payable on the first day of the month, one year after lh::\~\h\lIiOhe STATE declares that the PROJECT
<br />has been substantially completed, and yearly ther@!fI!J"'btltif"Uie entire principal sum and any accrued
<br />interest shall have been paid, Installment payments are to be ~~",payableto the CWCB at the address
<br />given below.' .' ~ 01:1 'j. " ,
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<br />e. Interest during construction. The BORROWER shall reR.aY;:fMlJ,!($'<f.~erest which will be calculated'
<br />monthly at an equivalent rate of five percent (~pet..iannlJm on each loan advance disbursed to the
<br />BORROWER during construction, Said accumulated interest shall be paid to the STATE as a single lump sum
<br />on the first day of the month following the month that tile STATE declares that the PROJECT has been
<br />substantially completed. The actual interest which will accumulate during construction is unknown and
<br />cannot be calculated 'until the conclusion of construction.
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<br />f, Prepayment conditions. The BORROWER may prepay all or any of the loan at any time, without penalty,
<br />These payments will be applied first to any accrued interestand then to reduce the principal amount.
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<br />9. Deed oftrust. The security provided for this loan and as evidenced by the executed deed of trust as attached
<br />hereto as Appendix B and made a part hereof, shall be the BORROWER'S interest in the following:
<br />
<br />Rapid Creek Reservoirs # 1 and #2, the land on which the reservoirs are situated, and the land surrounding
<br />the reservoirs consisting of Sections 22, 23, NW/4 Section 26, NE/4 Section 27, T11 S, R97\o/, 6th Principal
<br />Meridian, Mesa County, Colorado, and legal access to al/ of this property, the water rights thereof
<br />consisting of approximately 2,034 acre-feet as described below:
<br />1) Priority #103, Rapid Creek Reservoir #1,570.5 acre-feet, priority date 9/30/34, a~
<br />2) Priority #706, Rapid Creek Reservoir #1,581.74 acre-feet, PriOritY~d~te ~d '
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<br />LLOYO RANCH LIMITED PARTNERSHIP Page 4 of 1 0 ~ LOAN CONTRACT
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