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<br />statutory authority, its articles of incerporation, bylaws and resolution, including, but not
<br />limited to, levying additional assessments to raise sufficient revenue to assure repayment
<br />of the loan to the STATE.
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<br />d. Assessments For Operations, Maintenance And Reserves. Pursuant to its statutory
<br />authority, articles of incerporation, by-laws, and resolutions, the BORROWER shall levy
<br />assessments from time to time as necessary to provide sufficient funds for adequate
<br />operation and maintenance, emergency repair services, obsolescence reserves and debt
<br />service reserves. BORROWER shall deposit an amount equal to one-tenth of an annual
<br />payment into its debt service reserve fund one year from the first loan payment, and
<br />annually thereafter for the first ten years of this loan, In the event that the BORROWER
<br />applies funds from this account to repayment of the loan, the BORROWER shall replenish
<br />the acceunt within ninety (90) days of withdrawal of the funds.
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<br />14. Change of Use of Water Shares During Term of Contract. The BORROWER agrees to
<br />notify the STATE of any change of the use of the water rights represented by its shares from
<br />irrigation to municipal or commercial use, at which time the STATE, at its discretion, may
<br />adjust the interest rate on that portion of the outstanding loan amount corresponding to the
<br />percentage of shares for which the use has been changed to the CWCB's municipal or
<br />commercial rate in effect at the time of the change of use of the water rights, The parties
<br />shall execute a contract amendment to effect said change in interest rate,
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<br />15. Collateral During Repayment. The BORROWER shall not sell, convey, assign, grant,
<br />transfer, mortgage, pledge, encumber, or otherwise dispose of the CD ACCOUNT, the
<br />COLLATERAl or the revenues pledged herein to repay this loan, so long as any of the
<br />principal, all accrued interest, and late charges, if any, on this loan remain unpaid, without
<br />the prior written concurrence of the STATE. In the event of any such sale, transfer or
<br />encumbrance without the STATE'S written cencurrence, the STATE may at any time
<br />thereafter declare all outstanding principal and interest on this loan immediately due and
<br />payable.
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<br />16. Remedies For Default. Upon default in the payments herein set forth to be made by the
<br />BORROWER, or default in the performance of any cevenant or agreement contained herein, the
<br />STATE, at its option, may:
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<br />a, declare the entire principal amount, accrued interest, and late charges, if any, then
<br />outstanding immediately due and payable;
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<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
<br />default, and add the amount of such expenditures to the principal of the loan amount;
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<br />c, exercise its rights under the Promissory Note, Security Agreement, Assignment Of
<br />Deposit Account As Security, Deed of Trust, and/or Assignment Of Certificate Of Deposit;
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<br />d, apply the funds contained in the CD ACCOUNT to the repayment of the loan;
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<br />e, take any other appropriate action,
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<br />All remedies described herein may be simultaneously or selectively and successively
<br />enforced, The provisions Df this contract may be enforced by the STATE at its option without
<br />regard to prior waivers of previous defaults by the BORROWER, through judicial proceedings to
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<br />Chilcott Ditch Company
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