C153857 PIF

• Contract/PO #: C153857
• Contractor Name: Western Mutual Ditch Company
• Contract Type: Loan
• Loan Projects - Doc Type: Contract Documents

c. The BORROWER warrants that it has not employed or retained any company or person, other
than a bona fide employee working solely for the BORROWER, to solicit or secure this contract
and has not paid or agreed to pay any person, company, corporation, individual, or firm, other
than a bona fide employee, any fee, commission, percentage, gift, or other consideration
contingent upon or resulting from the award or the making of this contract.
d. The BORROWER warrants that the property identified in the Collateral Provisions of this contract
is not encumbered by any liens of any party other than the STATE or in any other manner.
12. Collateral. Part of the security provided for this loan, as evidenced by the executed Assignment of
Certificate of Deposit attached as Appendix 4 and incorporated herein, shall be an undivided one
hundred percent (100%) interest in a certificate of deposit account established by the BORROWER in
the amount of one annual loan payment ($7,196.21), hereinafter referred to as CD ACCOUNT. The
STATE shall use the funds contained in the CD ACCOUNT for the purpose of paying principal and
interest due under this contract not otherwise paid by the BORROWER. Any amount withdrawn by the
STATE for this purpose shall be replenished by the BORROWER within sixty days after such
withdrawal. The STATE shall not disburse any loan funds under this contract until the BORROWER has
established the CD ACCOUNT.
13. Pledge Of Property. The BORROWER hereby irrevocably pledges to the STATE for purposes of
repayment of this loan revenues from assessments levied for that purpose as authorized by the
BORROWER'S resolution and all of the BORROWER'S rights to receive said assessment revenues from
its stockholders (hereinafter collectively referred to as the "pledged property"). Furthermore,
BORROWER agrees that
a. Revenues For This Loan Are To Be Kept Separate. The BORROWER hereby agrees to set
aside and keep the pledged revenues in an account separate from other BORROWER revenues,
and warrants that it shall not use the pledged revenues for any other purpose.
b. Establish Security Interest. The BORROWER agrees that, in order to provide a security interest
for the STATE in the pledged property so that the STATE shall have priority over all other
competing claims for said property, it shall execute a Security Agreementttached hereto as
Appendix 5 and incorporated herein, and an As o p Lunt as Security,
attached as Appendix 6 and incorporated herein, prd s ment of any loan funds.
The BORROWER acknowledges that the STATE shall perfect its security interest in the
BORROWER'S right to receive assessment revenues by filing a UCC-1 Form with the Colorado
Secretary of State.
c. Assessments For Repayment Of The Loan. Pursuant to its statutory authority, articles of
incorporation and by-laws, and as authorized by its resolution, the BORROWER shall take all
necessary actions consistent therewith to levy assessments sufficient to pay this loan as required
by the terms of this contract and the promissory note. In the event the assessments levied by
the BORROWER become insufficient to assure such repayment to the STATE, the BORROWER shall
immediately take all necessary action consistent with its statutory authority, its articles of
incorporation, bylaws and resolution, including, but not limited to, levying additional assessments
to raise sufficient revenue to assure repayment of the loan to the STATE.
d. Assessments For Operations, Maintenance And Reserves. Pursuant to its statutory authority,
articles of incorporation, by-laws, and resolutions, the BORROWER shall levy assessments from
time to time as necessary to provide sufficient funds for adequate operation and maintenance,
Western Mutual Ditch Company Page 6 of 13 Loan Contract