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SECTION 5-SCHEDULE OF EXISTING DEBT <br /> No other debt, for the Augmentation Group, backed by the loan security described <br /> in Section 6 below, exists. <br /> SECTION 6-LOAN SECURITY <br /> The SECURITY provided for this loan, as evidenced by the executed SECURITY <br /> AGREEMENT (APPENDIX 5) and incorporated herein, shall be a pledge of assessment <br /> revenues backed by an assessment covenant and an undivided one hundred percent <br /> (ioo%) interest in the Union Reservoir Water Rights as more particularly described in <br /> the attached DEED OF TRUST (APPENDIX 6) and the STOCK ASSIGNMENT (APPENDIX 7), <br /> incorporated herein and in accordance with CWCB Policy No. 5. <br /> SECTION 7-ADDITIONAL CONDITIONS&CONTRACT REQUIREMENTS <br /> The Augmentation Group will use the water rights purchased with the CWCB loan <br /> funds to provide augmentation water for the irrigation of crops. If the water is no <br /> longer being used for agricultural purposes CWCB may adjust the interest rate <br /> accordingly.The parties shall amend this contract including a revised PROMISSORY <br /> NOTE, to effect said change in interest rate. <br /> SECTION 8-"CONSTRUCTION FUND PROGRAM"PROCEDURES FOR WATER RIGHTS PURCHASE <br /> PROJECTS <br /> A. The BORROWER must submit a written appraisal or opinion of value from a qualified <br /> water rights appraiser supporting the purchase price prior to disbursal of loan funds. <br /> B. The BORROWER shall pay all of the expenses related to the PROJECT when such bills are <br /> due. <br /> SECTION 9-ELIGIBLE EXPENSES FOR WATER RIGHTS PURCHASE PROJECTS <br /> A. Engineering associated with the feasibility report prepared as a requirement for this <br /> loan and associated with evaluating the suitability of the water rights for purchase by <br /> the BORROWER. <br /> B. Interest during completion of the PROJECT pursuant to Paragraph A.5 herein. <br /> C. Legal services for reviewing engineering services contracts and this CONTRACT. <br /> D. Purchase of the water rights. <br /> SECTION 10-DISBURSEMENT SCHEDULE <br /> For a water rights purchase: the BORROWER shall prepare a written request for funds <br /> that shall describe the upcoming closing on water rights purchase including, but not <br /> limited to, the name of the seller, cost, closing date, and appraisal value and support <br /> documentation in the form of copies of the sales agreement and the appraisal <br /> pursuant to Section 8(a) above. After receipt of the written request from the <br /> Appendix <br /> Page 2 of 3 <br />