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RESOLUTIONS OF THE SHAREHOLDERS <br />OF SANCHEZ DITCH AND RESERVOIR COMPANY <br />The Shareholders of Sanchez Ditch and Reservoir Company (Company), at a Shareholders' <br />meeting held 2012, at G t , Colorado, adopted the following resolutions concerning a <br />secured loan from the State of Colorado Water Conservation Board (CWCB), for the purpose of <br />making safety and operational improvements to the outlet works at Sanchez Reservoir in the <br />amount of $1,128,776 or such actual amount, more or less, as may be needed by the Company <br />and available from the CWCB including the CWCB loan origination fee of 1% of the loan amount. <br />NOW, THEREFORE, BE IT RESOLVED that these resolutions are irrepealable during the <br />term of the loan and, pursuant to the Company's bylaws, authorized the Board of Directors and <br />officers, RESOLVED as follows: <br />1. to enter into and comply with the terms of a contract with the Colorado Water Conservation <br />Board for a loan in the amount of $1,128,776, or such actual amount, more or less, as needed <br />to finance the project costs, including the CWCB loan origination fee of 1 %, and <br />2. to levy and collect assessments from the shareholders in an amount sufficient to pay the annual <br />amounts due under the LOAN CONTRACT, and to pledge assessment revenues and the <br />Company's right to receive said revenues for repayment of the loan, and <br />3. to place said pledged revenues in a special account separate and apart from other COMPANY <br />revenues, and <br />4. to make the annual payments required by the PROMISSORY NOTE and to make annual deposits <br />to a debt service reserve fund, and <br />5. to pledge the assessment revenues backed by a rate covenant and annual financial reporting <br />and the undivided one hundred percent (100 %) interest in the Sanchez Dam and Reservoir and <br />all appurtenant structures thereto, including all lands on which these facilities are located as <br />COLLATERAL for the loan and execute all documents, including a security agreement and DEED <br />OF TRUST, necessary to convey a security interest in said property to the CWCB, <br />6. to execute all documents as required by the LOAN CONTRACT, including, but not limited to, a <br />SECURITY AGREEMENT, PROMISSORY NOTE and DEED OF TRUST. <br />7. to take such other actions and to execute such other documents as may be necessary to <br />consummate and implement the loan. <br />Appendix 3a to Loan Contract C150342 <br />Page 1 of 2 <br />