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<br />SECTION 4 - BOARD ApPROVAL AND LEGISLATIVE AUTHORIZATION (IF NEEDED)
<br />
<br />At its July 2003, meeting, the CWCB approved a loan to the BORROWER in an amount
<br />up to $2,272,500 including $2,250,000 for PROJECT costs and $22,500 for the CWCS's 1 %
<br />loan service charge at an interest rate of 2.5% per annum for a repayment term of 30 years.
<br />
<br />SECTION 5 - SCHEDULE OF EXISTING DEBT
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<br />Existing debt (four loans from the CWCB): (1) Loan Contract C153715' dated March
<br />14, 1996 (amended June 27, 1996; December 2, 1996; April 9, 1997; May 28, 1997;
<br />and March 10, 2001), in the original principal amount of $3,688,567.74, (2) Loan
<br />Contract C153678 dated May 11, 1994, in the original principal amount of $65,000, (3)
<br />Loan Contract C153756 dated September 18, 1997, in the original principal amount of
<br />$65,000, and (4) Loan Contract C153768 dated May 28, 1997 (amended May 17,
<br />1999, January 14, 2000, and March 10, 2001), in the original principal amount of
<br />$1,875,583.50 .
<br />
<br />SECTION 6 - COLLATERAL
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<br />The collateral provided for this loan, as evidenced by the executed Deed of Trust,
<br />attached as Appendix 5 and incorporated herein, shall be an undivided one hundred
<br />percent (100%) interest in, 14.25 cubic feet per second of a total of 28.50 cubic feet per
<br />second decreed to the Keesee Ditch by the Sent County District Court and one-half of the
<br />BORROWER'S right, title and interest, including contract rights, to the Keesee storage account
<br />in John Martin Reservoir, as more completely described in the attached Deed of Trust
<br />("Collateral").
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<br />SECTION 7 - ADDITIONAL CONDITIONS & CONTRACT REQUIREMENTS
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<br />The CWCS's approval of its loan to the BORROWER included the following conditions:
<br />
<br />i. The BORROWER'S existing Loan Contract No. C153768 shall be closed out at the
<br />current level of disbursal of $1,875,583.50, and the date of substantial completion
<br />of this loan will be the date of the Borrower's closing on the purchase of the
<br />Keesee water rights. On the date of closing for the Keesee water rights, the
<br />BORROWER shall provide to the CWCB payment for the amount of accrued interest
<br />for said loan.
<br />
<br />ii. The BORROWER shall conduct a special election of its members and shareholders
<br />(1) authorizing the Board of Directors to execute the CWCB loan contract for the
<br />Keesee water rights purchase, and (2) approving in concept the required share
<br />assessment levels necessary to cover the BORROWER'S future expenses including
<br />all CWCB loan repayments. Said election shall be held in accordance with the
<br />Article III of the BORROWER'S bylaws (adopted September 10, 1998 and amended
<br />November 8,2002), with the exception that the 15% quorum requirement shall be
<br />increased to 50% and the approval requiring a 2/3 majority of the outstanding
<br />shares of stock represented by shareholders present or by proxy. The BORROWER
<br />shall provide CWCB with the official notice of the special meeting and election,
<br />prior to the meeting, and the election results, provided after the election, shall be
<br />certified by the BORROWER'S Secretary and presented to the CWCB.
<br />
<br />iii. The BORROWER must obtain necessary commitments from its members to ensure
<br />compliance with CRS 37-60-130 (3) (G) and (h) pertaining to the Arkansas River
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