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<br />reserves, and to assure repayment of the project loan to the <br />state as provided herein. Should the stockholders fail to set <br />any assessment, the Contractor shall establish an adequate <br />assessment for purposes of this contract pursuant to section <br />7-42-104(2), CRS (1986). <br /> <br />~ . ~;~' <br /> <br />10. Pursuant to its Articles of Incorporation and to its <br />By-Laws, have its Board of Directors take all necessary actions <br />consistent therewith to adopt an order or a resolution <br />authorizing the contractor to contract this loan debt, and <br />authorizing the President and the Secretary to pay the <br />indebtedness. Such orders shall be attached hereto as Exhibit C <br />and included herein. The Contractor, by a majority vote of its <br />Board of Directors, shall also authorize the warranty deed <br />security interest required by the state in paragraph B.14. <br />below. Such authorization shall be attached hereto and <br />incorporated herein as Exhibit D. The above conditions must be <br />performed by the Contractor prior to the State performance under <br />this contract. . <br /> <br />11. Pursuant to Section 7-42-104, CRS (1986), and to its <br />By-Laws, including, but not limited to, Article 4, the <br />Contractor, through its Board of Directors, shall take all <br />necessary actions consistent therewith to levy assessments to <br />raise sufficient funds to pay this contract loan debt in a <br />timely manner and as required by the terms and conditions herein <br />to assure repayment of the project loan to the state. In the <br />event that the assessment(s) levied by the Contractor, or the <br />revenues reSUlting therefrom, are or become insufficient to <br />assure repayment of the state as required by the terms and <br />conditions herein, then the Contractor, upon written notice <br />thereof from the State, shall immediately take all necessary <br />action consistent with its By-Laws and Section 7-42-104, eRS <br />(1986), including but not limited to additional assessments, to <br />raise sufficient revenue to assure repayment of the project loan <br />to the state. <br /> <br />12. Provide the state with such periodic reports as the <br />state may require and permit periodic inspections of its <br />operations and accounts by a designated representative.of the <br />state. <br /> <br />13. Repay to the state the total sum of Three Hundred Ten <br />Thousand Dollars ($310,000), which includes the project loan <br />amount and the Six-Thousand-Dollar ($6,000) feasibility report <br />amount, together with interest at the rate of five percent (5%) <br />per annum, said repayment to be made in constant annual <br />installments of Twenty Thousand One Hundred Fifty-Five Dollars <br />and Ninety Cents (2D,155.90) each, for thirty (30)years, as <br />shown in Exhibit E, attached hereto and incorporated by <br />reference herein, which first installment shall be due and <br />payable on the first day of the month next succeeding the month <br />in which the state determines that the project has been <br />substantially completed, and yearly thereafter until the entire <br />principal sum and interest shall have been paid. Said <br />installment payments shall be made payable to the Colorado Water <br />Conservation Board, payable at the offices of said Board in <br />Denver, Colorado. <br /> <br />14. As security for the loan to be made to it by the state, <br />execute a warranty deed within thirty (30) days of the <br />substantial completion of the project that shall convey to the <br />state an undivided fifty percent (50%) of the following: <br /> <br />\ <br />\ <br />I <br />.' <br /> <br />The Handy (Welch) Dam West (No.1) and all <br />appurtenances thereto. <br /> <br />15. Obtain and maintain general fire and hazard insurance on <br />the project in an amount not less than the outstanding amount of <br /> <br />Page j of 10 pages <br />