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<br />assessment revenues by filing a UCC-1 Forl'l1 with the Colorado Secretary of State. <br /> <br />c. Assessments For Repayment Of The Loan. Pursuant to its statutory authority, articles of <br />incorporation and by-laws, and as authorized by its resolutions, the BORROWER shall take all <br />necessary actions consistent therewith to levy assessments sufficient to pay this loan as required <br />by the terms of this contract and the promissory note.. In the event the assessments levied by <br />the BORROWER become insufficient to aSSUre such repayment to the STATE, the BORROWER <br />shall immediately take all necessary action consistent with its statutory authority, its <br />articles of incorporation, bylaws and reaolutions, including, but not limited to, levying <br />additional aSsessments to raise sufficient revenue to assure repayment of the loan to the <br />STATE. <br /> <br />d. Assessments For Operations, Maintenance And Reserves. Pursuant to its statutory authority, <br />articles of incorporation, by-laws, and resolutions, the BORROWER shall levy assessments from <br />time to time as necessary to provide sufficient funds for adequate operation and maintenance, <br />emergency repair services, obsolescence reserves and debt service reserves, BORROWER shall <br />deposit an amount equal to one-tenth of an <Innual payment into its debt service reserve fund on <br />an annual basis for the first ten years of this loan. <br /> <br />10. Collateral During Repayment. The BORROWER shall not sell, convey, assign, grant, transfer, <br />mortgage, pledge, encumber, or otherwise dispose of the shares provided as security for this loan, or <br />any of the membership fee or assessment revenues pledged to repay the loan herein, so long as any <br />of the principal and any accrued interest on this loan which remain unpaid, without the prior written <br />concurrence of the STATE. <br /> <br />11. Remedies For Default. Upon default in the payments herein set forth to be made by the BORROWER, <br />or default in the performance of any covenant or agreement contained herein, the STATE, at its option, <br />may: <br /> <br />a. declare the entire principal amount and accrued interest then outstanding immediately due and <br />payable; <br /> <br />b. act upon the promissory note, Security Agreements, Deed of Trust, Stock Assignment, and <br />Assignment of Deposit Account as Security; <br /> <br />c. take any other appropriate action. <br /> <br />All remedies described herein may be simultaneously or selectively and successively enforced. The <br />provisions of this contract may be enforced by the STATE at its option without regard to prior waivers <br />of previous defaults by the BORROWER, through judicial proceedings to require specific performance of <br />this contract, or by such other proceedings in law or equity as may be deemed necessary by the <br />STATE to ensure compliance with provisions of this contract and the laws and regulations under which <br />this contract is executed. The STATE'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 /> <br />12. In Event Of A Conflict. In the event of conflict between the terms of this contract and conditions as <br />set forth in any of the appendices, the provisions of this contract shall control. <br /> <br />13. Periodic Inspections. Throughout the term of this contract, the BORROWER shall permit a <br />designated representative of the STATE to make periodic inspections of the BORROWER'S operating <br />rec:Jrcs, maintenance records, and financial records. Such inspections are solely fer t;,s purpose of <br />verifying compliance with the terms and conditions of this contract. <br /> <br />Arkansas Groundwater Users Association <br /> <br />Page 5 of 10 <br /> <br />Loan Contract <br />