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<br />loan money to the STATE as required by this contract. <br /> <br />b. The BORROWER warrants that it has full power and authority to enter into this contract. <br />The execution and delivery of this contract and the performance and observation of its <br />terms, conditions and obligations have been duly authorized by all necessary actions of <br />the BORROWER. <br /> <br />c. The BORROWER warrants that it has not employed or retained any company or person, <br />other than a bona fide employee working solely for the BORROWER, to solicit or secure <br />this contract and has not paid or agreed to pay any person, company, corporation, <br />individual, or firm, other than a bona fide employee, any fee, commission, percentage, <br />gift, or other consideration contingent upon or resulting from the award or the making of <br />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 other deeds of trust to or liens of any party other <br />than the STATE or in any other manner. <br /> <br />11. Collateral. Part of the security provided for this loan, as evidenced by the executed Deed of <br />Trust attached as Appendix 4 and incorporated herein, shall be an undivided one hundred <br />percent (100%) interest in the BORROWER'S Ryan Gulch Dam and Reservoir together with <br />approximately 900 acres of land, as more particularly described in the attached Deed of <br />Trust, hereinafter referred to as "collateral." <br /> <br />12. Pledge Of Property. The BORROWER hereby irrevocably pledges to the STATE for purposes <br />of repayment of this loan revenues from assessments levied for that purpose as authorized <br />by the BORROWER'S resolution and all of the BORROWER'S rights to receive said assessment <br />revenues from its members (hereinafter collectively referred to as the "pledged property"). <br />Furthermore, BORROWER agrees that: <br /> <br />a. Revenues For This Loan Are To Be Kept Separate. The BORROWER hereby agrees to <br />set 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 5 incorporated herein, and an Assignment of Deposit Account as <br />Security, attached as Appendix 6 and incorporated herein, prior to the disbursement of <br />any loan funds. The BORROWER acknowledges that the STATE shall perfect its security <br />interest in the BORROWER'S right to receive assessment revenues by filing a UCC-1 Form <br />with the Colorado Secretary of State. <br /> <br />c. Assessments For Repayment Of The Loan. Pursuant to its statutory authority, articles <br />of incorporation and by-laws, and as authorized by its resolution, the BORROWER shall <br />take all necessary actions consistent therewith to levy assessments sufficient to pay this <br />loan as required by the terms of this contract and the promissory note. In the event the <br />assessments levied by the BORROWER become insufficient to assure such repayment to <br /> <br />Ryan Gulch Reservoir Company <br /> <br />Page 6 of 13 <br /> <br />Loan Contract <br />