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<br />3) Priority #778, Rapid Creek Reservoir #2, 219.09 acre-feet, priority date 8/19/46, and
<br />4) Priority #805, Rapid Creek Reservoir #2, 763 acre-feet, priority date 7/20/48, and
<br />5) 6,5 cfs from Generation Three Ditch and First Enlargement as decreed in Case #88CW303 dated
<br />7/24/92.
<br />
<br />BORROWER warrants that the only encumbrance on the above listed property is a deed of trust with Edward
<br />Corwin, Personal Representative of the estate of Walter R. Lloyd, dated May 15, 1989, in the original amount of
<br />$1,500,000, recorded May 15, 1989, in 800k 1742, Page 524, Mesa County, Colorado, and said deed of trust is
<br />only against the land, and said encumbrance is outstanding in the approximately amount of $125,000.
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<br />a. Remedies for default. Upon default in the payments herein set forth to be made by the BORROWER, or
<br />default in the performance of any covenant or agreement contained herein, the STATt, at its option, may:
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<br />(i) deciare the entire principal amount and accrued interest then outstanding immediately due and
<br />payable; ..
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<br />(ii) for the account of the BORROWER, incur and pay reasonable expenses for repair, maintenance, and
<br />operation of the PROJECT herein described and such expenses as may be necessary to cure the
<br />cause of default;
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<br />(iii) take, possession of the PROJECT, repair, maintain, and operate or lease it;
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<br />(iv) act upon the'deed of trust, security interest, and/or promissory note;
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<br />(v) take any other appropriate legal action.
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<br />All remedies described herein may be simultaneously or selectively and successively enforced. The
<br />provisions of this contract may be enforced by the STATE at its option without regard to prior waivers of
<br />',previous defaults by the BORROWER, through judicial proceedjngsit.~ui~ecific performance of this
<br />'contract, or by such other proceedings in law or equity as mayb~~ellMe'if~ecessary by the STATE to ensure
<br />co~plia~ce with provisions of this contract and the laws and.!~\luJ..atiorw,.ufder which this contract is
<br />entered mto. .MV'4 U l I~~
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<br />b, No sale or conveyance of ,any collateral until the loan.!lhle,pilif\.~~hall not sell, convey,
<br />assign, grant, transfer, mortgage, pledge, encumber, or'Bttttl'twYs"Ei olspose of the PROJECT or any portion
<br />thereof or the assessment revenues pledged to repay the loan' her~in, so l.ong as' any of the principal and
<br />any accrued interest required by the Promissory Note Provisions of the contract remain unpaid without the
<br />prior written concurrence of the STATE.
<br />
<br />c, This contract controls if there is a conflict. In the event of conflict between the terms of this contract
<br />and conditions as set forth in any of the appendices, the provisions of this contract shall control.
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<br />10. Sufficient funds. Pursuant to its Agreement of LImited Partnership, the BORROWER agrees to adjust its fiscal
<br />management procedures from time to time as necessary, upon written notice form the STA TE, to provide sufficient
<br />funds for adequate operation and maintenance, emergency repair services, and obsolescence reserves of the
<br />reservoirs, and for debt reserves and to assure repayment of the loan to the STA TE as provided herein.
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<br />11;' Progress reports. The BORROWER shall, with the assistance of the CONSULTANT, prepare a progress report
<br />which contains a statement of the actual PROJECT construction costs expended for that month and shall forward said
<br />statement to the STATE,
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<br />12. Periodic inspections. The BORROWER shall permit a designated rep
<br />inspections of PROJECT construction, operations and accounts', Any ch
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<br />, ntative of the ,STATE to make periodic
<br />pections by the STATE are solely for
<br />
<br />LLOYD RANCH LIMITED PARTNERSHIP
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<br />Page50f 'y
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<br />LOAN CONTRACT
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