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<br />b, Convey to the Colorado water Conservation Board, Department of
<br />Natural Resources, State of Colorado, by \varranty deed an undivided
<br />one-half interest to the Gray Lakes Reservoirs and all water rights
<br />appurtenant thereto, \vhich reservoirs are situated in Sections
<br />34 and 25) Township 8 North, Range 68 hlest of the Sixth Principal
<br />Meridian, located in the County of Larimer, State of Colorado.
<br />
<br />c. Permit periodic inspection of contruction by the authorized
<br />representatives of the State during constrllction aoc! permit the
<br />State to review and approve or disapprove any contract fori the
<br />construction of the project or the performance of tvork pursuant to
<br />such contracts or subcontracts, except that this provision shall
<br />not apply to ,;,JQrk heretofore accomplished by the Contrac tor.
<br />
<br />d. Without expense to the State, manage, operate and maintain the
<br />project system continuously and in an efficient and economical
<br />,manner, and assume all legal and financial liability for such
<br />management, operation and maintenance.
<br />
<br />e. Make the services of such project available within its capacity
<br />to all stockholders of the Contractor ,;vithout discriminntion as
<br />to race, color, religion, or natural origin at reasonable charges,
<br />including assessments, taxes, or fees in accordance with a schedule
<br />of such charges, whether for one or more classes of service, as
<br />may be formally adopted by the Contractor through its board of
<br />directors, and ~s may be modified from time to time by the
<br />Contractor. Th~ initial rate schedule must be approved by the
<br />State. Thereafter, the Contractor may make such modifications
<br />to the rate sch~dule as the Contractor deems necessary to efficiently
<br />and economicallY provide for the financial requirements of the .
<br />system as long ~s the rate schedule remains reasonable and non-
<br />discriminatory, and subject to the approval by the State.
<br />
<br />f. Adjust its operating costs and service charges from time to
<br />time to provide for adequate operation and maintenance, emergency
<br />repaLr services, obsolescence reserves, debt service, and debt
<br />reserves.
<br />
<br />g. Provide the state with such periodic reports as it n;ay require
<br />and pennit periodic inspections of its operation and accounts by
<br />a designated reI)resentative of the State. The Colorado ivater
<br />Conservation Bo~rd, its agents, and employees, is hereby
<br />designated as tne agent of the State for the purposes of this
<br />contract.
<br />
<br />h. To purchase from the State all of the State I s right, titll2,
<br />and interest in said project and any facilities thereof at a
<br />total purchase price of Two Hundred Seventy-Six Thousand,
<br />Eight Hundred Dollars ($276,800), payable in forty annual
<br />installments of Six Thousand, Nine Hundred, Twenty Dollars ($6,920)
<br />each, which firgt installment shall be due and payable on July
<br />1, 1979, and yec1rly thereafter until the entire principal sum
<br />shall have been paid. Said annual installment payment shall be
<br />made payable to the Colorado Hater Conservation Board, payable at
<br />the offices of said Board in Denver, Colorado.
<br />
<br />2. Upon default in the payments herein set forth to be made by the
<br />Contractor, or in the performance of any convenant or agreement
<br />contained herein, tile State, at its option, may (a) declare the entire
<br />principal amount then outstanding immediately due and payable; (b)
<br />for the account of the Contractor incur and pay reasonable expenses
<br />for'repair, maintenance, and operation of the water system herein
<br />described and such other reasonable expenses as may be necessary to
<br />cure the cause of default; and/or (c) take possession of the system,
<br />repair, maintain, and operate or lease it. The pr"ovisions of this
<br />contract may be enforced by ,the State at its option without regard to
<br />prior waivers by it of previous defaults by the Contractor through
<br />judicial proceedings to require specific performance of this contract
<br />or by such other proceedings in ImoJ or equity as may be deemed
<br />necessary by the State to insure compliance ';oJith provisions of this
<br />contract and the laws and regulations under ';vhich this contract is
<br />made.
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