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or greater than 110% of the LOAN AMOUNT, evidenced by the Certicate number(s) in the STOCK ASSIGNMENT and by execution of the DEED OF TRUST, Security Agreement and Stock Assignment(s) in the form attached hereto as APPENDIX 5a, 5b, and 5c respectively and incorporated herein, encumbering all the shares. This is in accordance with CWCB Financial Policy #5 (Collateral). The Stock Assignments shall become effective solely in the event of an issuance by a Colorado District Court of an order authorizing a foreclosure sale of said shares of stock pursuant to Rule 120 of the Colorado Rules of Civil Procedure. a. The BORROWER shall have the certificate(s) for the shares issued in both the BORROWER's and the CWCB's names, and shall give physical custody of the stock certificate(s) to the CWCB, which shall deposit the certificate(s) at the State Treasurer's Office for safekeeping. b. The BORROWER shall retain both the responsibility for paying assessments on and the privilege of voting said shares. SECTION 7 — ADDITIONAL CONDITIONS & CONTRACT REQUIREMENTS No Construction. CWCB and BORROWER hereby acknowledge and agree that the PROJECT does not include a construction component and that the distribution of loan proceeds will incur at a closing for the purchase of the WATER RIGHTS. Use of WATER RIGHTS. The Corporation must use the WATER RIGHTS purchased with the CWCB loan funds for irrigation of crops. If the water cannot be used for crop irrigation, the remaining balance of the loan may be called due within one year by the CWCB. SECTION 8 - CONSTRUCTION FUND PROGRAM PROCEDURES FOR WATER PURCHASE PROJECTS The BORROWER shall submit, in writing, copies of the sales agreement and the appraisal for the WATER RIGHTS including, but not limited to, the name of the seller, cost, closing date, appraisal value and support documentation prior to disbursal of loan funds. The BORROWER shall pay all of the expenses related to the PROJECT when such bills are due. SECTION 9 — ELIGIBLE EXPENSES FOR WATER PURCHASE PROJECTS. A. Engineering associated with the feasibility report prepared as a requirement for this loan and associated with evaluating the suitability of the WATER RIGHTS for purchase by the BORROWER. B. Interest during completion of the PROJECT pursuant to Paragraph A.4 of the LOAN CONTRACT. C. Legal services for review of engineering services contracts and this LOAN CONTRACT. D. Purchase of the WATER RIGHTS. 10 — DISBURSEMENT SCHEDULE For a WATER RIGHTS purchase, the BORROWER shall prepare a written request for funds that shall describe the upcoming closing on WATER RIGHTS purchase Appendix 1 to Loan Contract C150338 Page 2 of 3