PROJ02063

• Contract/PO #: C150234
• Contractor Name: Headgate 396 Lateral Corporation
• Contract Type: Loan
• Water District: 72
• County: Mesa
• Loan Projects - Doc Type: Feasibility Study

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3. Membership Approval-The Corporation agrees to seek approval by the
Membership of the Additions/Improvements to the Ditch proposed by the
Funding Members, including the contract, the Loan and this Funding Agreement.

4. If the Membership approves the Additions/Improvements for the Ditch
including the Contract and the Loan, the Funding Members hereby agree to pay
all of the costs incurred by the Corporation arising from the Contract, including
any cost of overruns, and from the Loan.

5. The Corporation shall set the annual date for payment by the Funding
Members and send and invoice to each Member thirty days prior to the due date.
The Funding Members agree to pay the first annual installment to the
Corporation at the time of the first draw on the Loan, which the Company shall
sue to establish a payment reserve account for repayment of the Loan. The
Funding Members further Agree to pay a second annual payment into the
payment reserve account over the first three years of the Loan (to be surcharged
one-third of an annual payment each year).

6. 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 additional pro-rated payment to the
Corporation that totals the amount owed by the defaulting Funding Member(s).
The additional payment shall be sue ten working days from the Funding
Members' receipt of notice from the Corporation of the additional amount due. In
the notice, the Corporation shall identify the amount each Funding Member
needs to pay as his or her share of the amount needed for the annual
payment(s) that were not made to the Corporation. The Funding Members and
Corporation intend that the CWCS is a third-party beneficiary of this paragraph.

7. The Corporation agrees to receive prepayments of principal from any
Funding Member at anytime and credit such amounts immediately against the
Member's obligation. A Funding Member ceased to be a Funding Member upon
prepayment of his/her total remaining share of the Loan balance.

8. Any Funding Member who fails to pay an assessment to the
Corporation when due shall be a Defaulting Member and, as such, agrees to be
subject to applicable policies and regulations of the Corporation which may
include, but is not limited to, imposition of fines, fees, penalties, interest, and loss
of rights as a member.

9. The Funding Members agree to share the cost arising from the NRCS
Contract and for the CWCS Loan repayment equally. The Corporation agrees
that the Funding Members shall be entitled to carry the above maximum
amounts of water in the pipeline.

10. The Corporation agrees that any Member of the Corporation or any