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~9~23I2005 16:48 97653374?___, PAGE 02 - estimated cost of the work, the method for sharing the cost, including any overruns that may occur, and the proposed schedule for conduct of the work. `Z ,-- The Loan- The loan from CWCB is defined by the feasibility study, the loan application and the Loan Contract, which includes the Promissory Note, the Resolutions, the Secu Agreemerrt, the Deed of Trust and the loan commi#ment; all attached hereto as~xhibit B and made a part of this Agreement. 3-~ Membership Approval- The Company agrees to seek approval by the Membership of the Additions/Improvemen#s to the Ditch proposed by the Funding Members, including the Contract, the Loan and this Funding Agreement. ~l, If the Membership approves the Additions/Improvements to the Ditch including the Contract and the Loan, the Funding Members hereby agree to pay all of the oosts incurred by the Company arising from the Contract, inciuding any cost overruns, and from the Loan. ~, The Company shall set the annual date for payme~ by the Funding Members and send an invoice to each Member thirty days pnor to the due date. The Funding Members agree to pay the first annual installment to the Company at the time of the first draw on the Loan, which the Company shall use to establish a payment reserve account for repayment of the Loan. The Funding Members #urther Agree to pay a second annual pa ment into the payment reserve account over the first three years of the Loan ~to be surcharged one-third of an annual payment each year). ~,- The Funding Members agree that if any Funding Member fails to make the annual payment required under Sections 4 and 5 herein, the remaining Funding Members will each make an add~tional pro-rated paymen# to the Company that totals the amount owed by the defaulting Funding Member(s). The additional payment shall be due ten working days from the Funding Members' receipt of notice from the Company of the additional amount due. In the notice, the Company shall identify the amount each Funding Member needs to pay as his or her share of the amount needed for the annual pa~ment(s) ihat were not made to the Company. The Funding Members and Company intend that the CWCB is a third-party beneficiary of this paragraph. ~7, - The Cvmpany a~rees to receiv~ prepayments of principal trom any FundEng Member at any time and credit such amounts immediately against the Member's obligation. A Funding Member ceases to be a Funding Member upon prepayment of his/her total remaining share of the Loan balance. ~-~ Any ~unding Member who #ails to pay an assessment to #he Company when due shall be a Defaufting Member and, as such, agrees to be subject to applicabie poficies and regulatfons of the Company which may include, but is not Iimited to, imposition of fines, fiees, pena~ies, interest and loss of rights as a member.