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<br />7. That the DEBTOR will not use the COLLATERAL in violation of any applicable statutes,
<br />regulations, ordinances, articles of incorporation or bylaws.
<br />
<br />DEBTOR SHALL BE IN DEFAULT under this agreement upon the happening of any of the
<br />following events or conditions:
<br />
<br />a. default in the payment or performance of any obligation, covenant or liability contained
<br />or referred to herein or in any note evidencing the same;
<br />
<br />b.' the making or furnishing of any warranty, representation or statement to SECURED
<br />PARTY by or on behalf of DEBTOR which proves to have been false in any material
<br />respect when made or furnished;
<br />
<br />c. loss, theft, damage, destruction, sale or encumbrance to 'or of any of the COLLATERAL,
<br />or the making of any levy seizure or attachment thereof or thereon;
<br />
<br />d. dissolution,termination, of existence, insolvency, business failure, appointment of a
<br />receiver of any part of the property of, assignment for the benefit of creditors by, or the
<br />commencement of any proceeding under any bankruptcy or insolvency law of, by or
<br />against DEBTQ r a guarantor or surety for DEBTOR.
<br />
<br />UPON SUCH DEFA T nd at any, . ereafter, or if it deems itself insecure, SECURED
<br />PARTY may declare a,lI 0 gations se red he ,bY im~m' tely due and payable and shall have
<br />the remedies of a secured party unde rticle of the C orado Un' Commercial Code. In
<br />addition, upon default, 'SECURED PARTY have the ht to tran r COLLATERAL to and
<br />register the COLLATERAL in the name of the SECURED TV, and, ethe or not so transferred
<br />and registered, to receive the income, dividends and other distrib s reon and apply them
<br />to repayment of the loan. Expenses of retaking, holding, preparing for sale, selling. or the like
<br />shall include SECURED PARTY'S reasonable attorney's fees and legal expenses.
<br />No default shall be waived by SECURED PARTY except in writing, and no waiver by SECURED
<br />PARTY of any default shall operate as a waiver of any other default or of the same default on a
<br />future occasion. The taking of this security agreement shall not waive or impair any other
<br />security said SECURED PARTY may have or hereafter acquire for the payment of the above
<br />indebtedness, nor shall the taking of any such additional security waive or impair this security
<br />agreement; but said SECURED PARTY shall retain its rights of set-off against DEBTOR. In the
<br />event court action is deemed necessary to enforce the terms and conditions, set forth herein,
<br />said action shall only be brought in the District Court for the City and County of Denver, State of
<br />Colorado, and DEBTOR consents to venue and personal jurisdiction in said Court.
<br />
<br />All rights of SECURED PARTY hereunder shall inure to the benefit of its successors and
<br />assigns; and all promises and duties of DEBTOR shall bind its heirs, executors or administrators
<br />or its successors or assigns. 'If there be more than one DEBTOR, their liabilities hereunder shall
<br />be joint and several.
<br />
<br />/'~~ >~at.edJhis J day of
<br />
<br />I ('"f;.~j' '/ f~ '
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<br />B // ,--'
<br />
<br />A~
<br />
<br />2000
<br />
<br />
<br />DEBTOR: Columbine Ranches Property Owner's
<br />Association ~ fI
<br />
<br />BY~~
<br />,'~, Ben Pacheco, President
<br />
<br />/'
<br />
<br />-----~.----
<br />
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