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Section 37- 60- 122(1)(b), C.R.S., authorizes the CWCB to make loans of up to $10,000,000 from the CWCB's Construction Fund and the State Severance Tax Trust Fund Perpetual Base Account Fund without prior approval from the General Assembly. SECTION 4 - BOARD APPROVAL AND LEGISLATIVE AUTHORIZATION (IF NEEDED) At its September, 2012 meeting, the CWCB approved a Small Project Loan from the Construction Fund to the BORROWER in an amount up to $3,030,000 for PROJECT costs, not to exceed 90% of the cost of the PROJECT, with a loan origination fee of 1 % in accordance with CWCB Policy No. 16, at an interest rate of 1.75% per annum for a repayment term of 30 years. SECTION 5 — SCHEDULE OF EXISTING DEBT BORROWER's existing debt consists of a CWCB loan, Loan Number C150194, issued in 2010 for acquisition of water rights and gravel pit storage. The initial balance was $14,934,612 at 2.50% over a 30 -year term, resulting in an annual payment of $713,541. The current principal balance is $14,245,757 and collateral for the loan is a pledge of the 9 mill property tax revenues. SECTION 6 — ADDITIONAL CONDITIONS & CONTRACT REQUIREMENTS The Borrower agrees to convey, as COLLATERAL, an undivided one hundred percent (100 %) interest in all WATER RIGHTS purchased with LOAN CONTRACT funds. Prior to disbursement of funds, the BORROWER shall provide CWCB an appraisal or written opinion of the value of WATER RIGHTS proposed for purchase and an engineering analysis identifying how the water will be put to beneficial use. Any modification to the original contract, to include Water Rights as Collateral, shall require a properly executed amendment which shall include a DEED OF TRUST in the form of an attachment to the amendment and where applicable, a STOCK ASSIGNMENT in the form of an attachment to the amendment. Each executed appendix shall automatically be incorporated into and be part of this LOAN CONTRACT on the date of such change as if fully set forth herein. SECTION 7 — PROCEDURES FOR WATER PURCHASE PROJECTS AND CONSTRUCTION PROJECTS A. The BORROWER must submit a written appraisal or opinion of value from a qualified water rights appraiser supporting the purchase price, prior to disbursal of loan funds for the purchase of water rights. B. The BORROWER shall pay all of the expenses related to the PROJECT when such bills are due. C. The BORROWER shall employ an engineer, registered in the state of Colorado to prepare plans and specifications for the PROJECT. D. Engineering contracts, plans and specifications must be submitted to the CWCB staff for verification of compliance with the terms of this CONTRACT when available Appendix 1 to Loan Contract C150337 Page 2 of 4