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<br />execution and delivery of this contract and the performance and observation of its terms, <br />conditions and obligations have been duly authorized by all necessary actions of the <br />BORROWER. <br /> <br />c. The BORROWER warrants that it has not employed or retained any company or person, other <br />than a bona fide employee working solely for the BORROWER, to solicit or secure this contract <br />and has not paid or agreed to pay any person, company, corporation, individual, or firm, <br />other than a bona fide employee, any fee, commission, percentage, gift, or other <br />consideration contingent upon or resulting from the award or the making of this contract. <br /> <br />d. The BORROWER warrants that the property identified in the Collateral Provisions of this <br />contract is not encumbered by any deeds of trust to or liens of any party or in any other <br />manner. <br /> <br />. 11. Collateral. Part of the security provided for this loan, as evidenced by the executed Assignment <br />of Certificate of Deposit attached as Appendix 3 and incorporated herein, shall be an undivided <br />one hundred percent (100%) interest in a certificate of deposit account established by the <br />BORROWER in the amount of one annual loan payment ($3,094.37), hereinafter referred to as CD <br />ACCOUNT. The STATE shall use the funds contained in the CD ACCOUNT for the purpose of paying <br />principal and interest due under this contract not otherwise paid by the BORROWER. Any amount <br />withdrawn by the STATE for this purpose shall be replenished by the BORROWER within sixty days <br />after such withdrawal. The STATE shall not disburse any loan funds under this contract until the <br />BORROWER has established the CD ACCOUNT. <br /> <br />12. Pledge Of Property. The BORROWER hereby irrevocably pledges to the STATE for purposes of <br />repayment of this loan revenues from assessments levied for that purpose as authorized by the <br />BORROWER'S resolution and all of the BORROWER'S rights to receive said assessment revenues <br />from its members (hereinafter collectively referred to as the "pledged property"). Furthermore, <br />BORROWER agrees that <br /> <br />a. Revenues For This Loan Are To Be Kept Separate. The BORROWER hereby agrees to set <br />aside and keep the pledged revenues in an account separate from other BORROWER <br />revenues, and warrants that it shall not use the pledged revenues for any other purpose. <br /> <br />b. Establish Security Interest. The BORROWER agrees that, in order to provide a security <br />interest for the STATE in the pledged property so that the STATE shall have priority over all <br />other competing claims for said property, it shall execute a Security Agreement, attached <br />hereto as Appendix 4 incorporated herein, and incorporated herein. The BORROWER <br />acknowledges that the STATE shall perfect its security interest in the BORROWER'S right to <br />receive assessment revenues by filing a UCC-1 Form 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 resolution, the BORROWER shall take all <br />necessary actions consistent therewith to levy assessments sufficient to pay this loan as <br />required by the terms of this contract and the promissory note. In the event the assessments <br />levied by the BORROWER become insufficient to assure such repayment to the STATE, the <br />BORROWER shall immediately take all necessary action consistent with its statutory authority, <br />its articles of incorporation, bylaws and resolution, 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 <br />authority, articles of incorporation, 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 disbursement, and <br />