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AGENCY NAME: Colorado Water Conservation Board AGENCY NUMBER: PDA ROUTING NUMBER: (){)U ) I $90,000 LOAN CONTRACT THIS CONTRACT, made this /;.)0 day of AU(,:;U;:"i 1998,by and between the State of Colorado for the use and benefit of the Department of Natural Resources, Colorado Water Conservation Board (CWCB), hereinafter referred to as the STATE, and Rodney J. Preisser, 90 South Cascade Avenue., Suite 950, Colorado Springs, CO 80903, hereinafter referred to as the BORROWER and/or CONTRACTOR. FACTUAL RECITALS 1. Authority exists in the law, and funds have been budgeted, appropriated and otherwise made available and a sufficient unencumbered balance thereof remains available for payment in Fund Number 424, Organization YYYY, Appropriation SPL, GBL P824, Program WTRC, Object Code 5120, Reporting Category 3824 Contract Encumbrance Number C153824. 2. Required approval, clearance, and coordincltion have been accomplished from and with appropriate agencies. 3. Pursuant to the provisions of 99 37-60-119 and 37-60-120, C.R.S. (1997), the STATE is authorized to loan money for water projects for the benefit of the people of the STATE, provided that the borrower assures repayment of that money. 4. Section 37-60-122.7, C.R.S. (1997) authorizes the STATE to make loans of up to $100,000 from the Small Project Loan Account of the construction Fund without prior approval from the General Assembly if the STATE determines that delay would result in undue hardship on the borrower. 5. The BORROWER, who owns wells in the Horse Creek basin, applied to the STATE for a loan in the amount of $90,000 to be used to partially finance the purchase of certain water rights from the Box Springs Canal and Reservoir 'Company and individual shareholders of the Box Springs Canal and Reservoir Company ("Box Springs Water Rights"), and as partial compensation to Reid Cattle Co. ("Reid") for 550 acre-feet of consumptive use, said purchase and compensation hereinafter referred to as the PROJECT. The BORROWER obtained an augmentation plan decree using the Box Springs Water Rights as the source of augmentation water, in Case No. 97CW106, decree entered May 19, 1998. The BORROWER also has entered into a settlement agreement which settles issues raised in the declaratory judgment action brought by the BORROWER (Case No. 97CW010), and broader water use issues in the Horse Creek Basin, which settlement agreement requires, inter alia, compensation to Reid. The parties in Case No. 97CW010 (the BORRowER, the Colorado State Engineer, Box Springs Canal and Reservoir Company ("Box Springs"), Smith Cattle, Inc., and Reid Cattle Co.), along with the Horse Creek Water Users Association ("HCWUA"), entered into said settlement Rodney J. Preisser Page 1019 Loan Contract