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<br />'\ <br /> <br />f. Prepayment conditions. The BORROWER may prepay all or any of the loan at any time, without <br />penalty, These payments will be applied first to any accrued interest and then to reduce the principal <br />amount. <br /> <br />9. Deed of trust. The security provided for this loan and as evidenced by the executed deed of trust as <br />shown in Appendix B shall be an undivided one hundred percent (100%) interest in the following: <br /> <br />All of the water rights of Military Park Reservoir, located in the West 1/2 of Section 34. <br />Township 11 South, Range 94 West. Sixth Principal Meridian, Delta County, State of <br />Colorado. <br /> <br />a. Remedies for default. Upon default in the payments herein set forth to be made by the BORROWER, <br />or default in the performance of any covenant or agreement contained herein, the STATE. at its option, <br />may: <br /> <br />(i) declare the entire principal amount and accrued interest then outstanding immediately due <br />and payable; <br /> <br />(ii) for the account of the BORROWER, incur and pay reasonable expenses for repair. <br />maintenance, and operation of the PROJECT herein described and such expenses as may be <br />necessary to cure the cause of default; <br /> <br />(iii) take possession of the PROJECT. repair, maintain. and operate or lease it; <br /> <br />(iv) act upon the deed of trust, security interest. and promissory note; <br /> <br />(v) take any other appropriate legal action. <br /> <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 <br />of previous defaults by the BORROWER, through judicial proceedings to require specific performance of <br />this contract, or by such other proceedings in law or equity as may be deemed necessary by the STATE <br />to ensure compliance with provisions of this contract and the laws and regulations under which this <br />contract is entered into. <br /> <br />b. No sale or conveyance of any collateral until the loan is repaid. The BORROWER shall not sell, <br />convey. assign. grant. transfer, mortgage, pledge. encumber, or otherwise dispose of the PROJECT or <br />any portion thereof or the assessment revenues pledged to repay the loan herein, so long as any of the <br />principal and any accrued interest required by the promissory note provisions of the contract remain <br />unpaid without the 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 <br />contract and conditions as set forth in any of the appendices, provisions of this contract shall control. <br /> <br />10, Pledge of revenues. The BORROWER agrees thatthe specific revenues to be pledged to repay the STATE <br />shall include, but not be limited to, an assessment levied for that purpose as authorized by resolution of the <br />BORROWER. <br /> <br />a. Revenues for this loan are to be kept separate. The BORROWER hereby pledges such revenues to <br />repay the STATE loan. agrees that these revenues will be set aside and kept separate from other <br />BORROWER revenues, warrants that these revenues will not be used for any other purpose, and agrees <br />to provide the STATE a perfected security interest such that the STATE has priority over all other <br />competing claims for such secured revenues, <br /> <br />MILITARY PARK RESERVOIR COMPANY <br /> <br />Page50f11 <br /> <br />LOAN CONTRACT <br />