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<br />J. At its March 1996 meeting, the CWCB approved a Small Project Loan to the BORROWER to
<br />be used to refinance the costs of the PROJECT in an amount not to exceed $27,000, at an interest
<br />rate of 30/..% per annum for a duration of 10 years,
<br />
<br />J. During the course of PROJECT construction, the BORROWER discovered that the PROJECT
<br />costs were higher than originally anticipated and requested an additional $13,000 from the STATE.
<br />The CWCB staff has reviewed the situation and concluded that the PROJECT still is financially feasible,
<br />
<br />K, At its May 1996 meeting, the CWCB approved increasing the loan to $45,000, which
<br />amount is not to excced 75% of the total project cost, at 4% interest for a term of 20 years,
<br />
<br />L. The BORROWER, the Snyder-Smith Ditch Company ("Snyder-Smith") and Pioneer Water and
<br />Irrigation Inc, ("Pioneer") entered into an agreement on May 11, 1987 (" 1987 Agreement"), under
<br />which Pioneer may run and deliver water through the BORROWER'S and Snyder-Smith's facilities for
<br />a handling fee determined by the number of acre-feet run through the facilities, which is paid on an
<br />annual basis. The 1987 Agreement was recorded on March 14, 1987, in the Office of the Clerk and
<br />Recorder of Morgan County in Book 891 at Page 338. The handling fee was raised in March 1993,
<br />
<br />M. The STATE now desires, by this contract, to loan money to the BORROWER for this PROJECT
<br />upon mutually agreeable terms and conditions.
<br />
<br />NOW THEREFORE, in consideration of the mutual and dependent covenants contained, the
<br />parties agree as follows:
<br />
<br />A. The BORROWER agrees as follows:
<br />
<br />1, BORROWER'S indemnification of the STATE. The BORROWER shall, without expense or legal
<br />liability to the STATE, manage, operate, and maiMain the PROJECT continuously in an efficient and
<br />economical manner. The BORROWER agrees to indemnify and hold the STATE harmless from any
<br />liability incurred by the STATE as a result of the STATE'S interest in the PROJECT facilities,
<br />
<br />2. BORROWER'S liability insurance. Upon execution of this contract and continuing until
<br />complete repayment of the loan is made to the STATE, the BORROWER shall maintain commercial
<br />general liability insurance with a company that is satisfactory to the STATE covering the management,
<br />operation, and maintenance of the PROJECT with minimum limits of $1 ,000,000 combined single limit
<br />for each occurrence and $2,000,000 general aggregate, including products/completed operations and
<br />personal injury,
<br />
<br />Said general liability insurance shall name the STATE as additional insured, A copy of a
<br />certificate of said insurance and an additional insured endorsement must be filed with the STATE,
<br />Evidence of current insurance coverage is to be provided as renewals occur. No loan funds shall be
<br />advanced by the STATE without evidence of said current coverage. Throughout the life of this
<br />contract, the STATE reserves the right to increase the above amount of insurance so that said
<br />amounts at a minimum correspond to the amounts established by the Colorado Governmental
<br />Immunity Act, now and as hereafter amended,
<br />
<br />3, BORROWER'S authority to contract. The BORROWER shall, pursuant to its statutory authority,
<br />articles of incorporation, and by-laws, have its shareholders and board of directors adopt resolutions,
<br />irrepealable during the life of this loan, authorizing the President and Secretary, on behalf of the
<br />BORROWER, to do the following:
<br />
<br />a. Contract for this loan with the STATE, and to pay the indebtedness, and
<br />
<br />Tremont Mutual Ditch Company
<br />
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<br />Loan Contract
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