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III. BORROWER and EvaNS have executed a Conditional Assignment of Contract Proceeds, <br />attached as Appendix I and incorporated herein, assigning the STATE ItS right, title and <br />interest in and to the income from the lease of augmentation water to AGUA pursuant to the <br />BoRROwER/AGUA lease agreement in the event of default by the BoRROwER under this <br />contract and renewals thereof. <br />iv. BoRROwER and EvArvs agree that in the event the AGUA lease agreement is not renewed, <br />and the BORROWER and/or EvaNS enter into a lease agreement with another party, the <br />BoRROwER and Eva,NS shall execute a Conditional Assignment of Contract Proceeds in the <br />form attached as Appendix I to convey a security interest to CWCB in the proceeds of the new <br />lease agreement, and shall provide a copy of the lease agreement and renewals thereof. <br />13. Security during repayment. The BORROWER and EvANS shall not sell, convey, assign, grant, <br />transfer, mortgage, pledge, encumber, or otherwise dispose of any security for this loan, including the <br />PRO~ECT or any portion thereof, the shares of stock, or the assessment revenues pledged to repay <br />the loan herein, so long as any of the principal and any accrued interest on this loan remain unpaid, <br />without the prior written concurrence of the STATE. <br />14. Remedies for default.. The BORROWER and EvANS agree that in the event of default in the <br />repayment of this loan or default in the performance of any covenant or agreement contained herein, <br />the STATE, at its option, may exercise any of the remedies listed below: <br />a. declare the entire principal amount and accrued interest then outstanding immediately due and <br />b. incur and pay reasonable expenses for repair, maintenance, and operation Of the PROJECT <br />facilities herein described and such expenses as may be necessary to cure the cause of default, <br />and add the amount of such expenditures to the principal of the loan amount; and/or <br />c. act upon the deeds of trust, stock assignments, security agreements, conditional assignment of <br />contract proceeds or promissory note; and/or <br />d. take possession of the shares of stock and lease the water represented by those shares; and/or <br />e. take possession of the PRO~ECT facilities, repair, maintain, and operate or lease them; and/or <br />f. take any other appropriate action. <br />All remedies described herein may be simultaneously or selectively and successively enforced. The <br />provisions of this contract may be enforced by the ST,4TE at its option without regard to prior waivers <br />of previous defaults by the BoRROwER, through judicial proceedings to require specific performance <br />of this contract, or by such other proceedings in law or equity as may be deemed necessary by the <br />STa,TE to ensure compliance with provisions of this contract and the laws and regulations under which <br />this contract is executed. The STarE's exercise of any or all of the remedies described herein shall <br />not relieve the BoRROwER of any of its duties and obligations under this contract. <br />15. In event of a conflict. In the event of conflict between the terms of this contract and conditions as set <br />forth in any of the appendices, the provisions of this contract shall control. <br />16. Pledge of revenues. The BoRROwER agrees that the specific revenues to be pledged to repay the <br />STATE Shall include, but not be limited to, assessments levied for that purpose as authorized by <br />resolution of the BORROwER. Furthermore, BORROWER agrees that <br />a. Revenues for this loan are to be kept separate. The BORROWER hereby pledges such <br />revenues to repay the STATE loan, agrees that these revenues shall be set aside and kept in an <br />account separate from other BoRROwER revenues, and warrants that these revenues shall not be <br />used for any other purpose. <br />b. Establish security interest in the revenues. The BoRROwER agrees that, in order to provide a <br />security interest for the STATE in the revenues so that the Sr,4TE shall have priority over all other <br />competing claims for such revenues, it shall provide an executed security agreement, attached as <br />Appendix J and incorporated herein. The Borrower acknowledges that the State shall file a <br />The Excelsior Irrigating Company Page 6 of 12 Loan Contract <br />