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<br />7~1 <br /> <br />which will acc\Jmulate during construction is unknown and cannot be calculated until the <br />conclusion of constructiOIl. <br /> <br />f. Prepayment conditions. The BORROWER may prepay all or any of the loan at any time, <br />without penalty. These payments will be applied first to any accrued interest and then to <br />reduce the principal amount. In the event of any prepayment, this contract shall not be <br />treated as in default with respect to payment so long as the unpaid balance of principal and <br />interest is less than it would have been nad the periodic payments been made as stated <br />above. <br /> <br />9. Collateral. The BORROWER is providing the following security for this loan: 536 shares of <br />stock in the Union Ditch and Water Company, owned by the BORROWER, and evidenced by stock <br />certificates numbered 1557.1656, and 3785, each of which BORROWER warrants is not encumbered <br />in any way. The stocks entitle the holder thereof to a specified volume of water from the Union <br />Ditch and Water Company. In order to protect both the STATE'S and the BORROWER'S interest in the <br />collateral, the conditions listed below will be followed: <br /> <br />a. ewCB's name shall replace that of the BORROWER on the certificates and in the books of <br />Union Ditch and Water Company in the event the BORROWER defaults under this loan contract. <br /> <br />b. The STATE'S security interest in the certificates will be evidenced by a ucc Security <br />Agreement and Financing Statement. said ucc document shall be the same as described in <br />Paragraph A.13.b, and shall include both the collateral and the pledge of revenues. <br /> <br />c. The STATE shall give physical custody of tile stock certificates to the state Treasurer's Office <br /> <br />d. The BORROWER shall retain both the responsibility for paying assessments and the priviiege <br />of voting such shares; <br /> <br />10. Remedies for default. Upon default in the payments herein set forth to be made by the <br />BORROWER, or default in the performance of any covenant or agreement contained herein, and such <br />default persists for ninety (90) days. the STATE. at its option, may <br /> <br />a. declare the entire principal amount and accrued interest then outstanding immediately <br />due and payable; <br /> <br />b. for the account of the BORROWER, incur and pay reasonable expenses for repair, <br />maintenance, and operation of the PROJEc1 herein described and such expenses as may be <br />necessary to cure the cause of default; . <br /> <br />c. take possession of the PROJECT, repair, maintain, and operate or lease it; <br /> <br />d. act upon the collateral, the security interest, and the promissory note; <br /> <br />e. take any other appropriate legal action.. <br /> <br />All remedies described herein may be simultaneously or selectively and successively enforced. <br />The proviSions of this contract may be enforced DY the STATE at its option without regard to prior <br />waivers of previous defaults by the BORROWER, through judicial proceedings to require specific <br />performance of this contract, or by such other rroceedings in law or equity as may be deemed <br />necessary by the STATE to ensure compliance with provisions of this contract and the laws and <br />regulations under which this contract is entered into. <br /> <br />11. No sale or conveyance of any collateral until the loan is repaid. The BORROWER shall not <br />sell, convey, assign, grant, transfer, mortgage, rledge, encumber, or otherwise dispose of any <br /> <br />RAINBOW PARK WATER COMPANY <br /> <br />Page 5 of 1 1 <br /> <br />lOAN CONTRACT <br />