<br />c, Debt Service Reserve Account. The BORROWER shall deposit an amount equal to
<br />one-tenth of an annual payment into its debt service reserve account on an annual
<br />basis for the first ten years of this loan, In the event that the Borrower applies funds from
<br />this account to repayment of the loan, the Borrower shall replenish the account as soon as
<br />practicable under law,
<br />
<br />d, Additional Debts or Bonds, The BORROWER shall not issue any indebtedness payable
<br />from the pledged revenues and having a lien thereon which is superior to the lien of this
<br />loan, The BORROWER acknowledges and understands that it may issue parity debt only
<br />after obtaining prior written approvai from the CWCB..
<br />
<br />9. Collateral, Part of the security provided for this loan shall be an undivided one hundred
<br />percent (100%) interest in the following, hereinafter referred to as COLLATERAL: 23.54 acre-
<br />feet of Antero Reservoir water, evidenced by Account No, 002430 on the records of the
<br />Denver Water Department and by Antero Reservoir Certificate No. 1037,and 27.39 acre-
<br />rights of High Line Canal water, evidenced by Account No, 008940 on the records of the
<br />Denver Water Department, and any additional water rights to be purchased by the
<br />BORROWER as they become available, The BORROWER has executed and delivered a Deed of
<br />Trust, Security Agreement and Assignment of Certificate, attached hereto as Appendix C
<br />and incorporated herein, to convey a security interest in the water rights it currently owns to
<br />the STATE, Contemporaneously with closing on the purchase of the additional water rights,
<br />the BORROWER shall execute a Deed of Trust, Security Agreement and Assignment of
<br />Certificate, using the same forms attached hereto as Appendix C, to convey a security
<br />interest in the water rights to the STATE, To protect the STATE'S and the BORROWER'S
<br />interests in the COLLATERAL, the BORROWER shall meet the follo:^,ing conditions:
<br />
<br />a, The BORROWER shall have the certificates issued in the BORROWER'S name, with the
<br />CWCB identified on the certificates as a lienholder,
<br />
<br />b, The BORROWER shall retain both the responsibility for paying assessments on and the
<br />privilege of voting said shares,
<br />
<br />c, The BORROWER shall record the Deeds of Trust contemporaneously with the BORROWER'S
<br />deeds as it acquires the water rights, and shall execute and deliver to the STATE the
<br />Security Agreements and Assignments of Certificates upon closing on each purchase of
<br />the water rights,
<br />
<br />10, Collateral during repayment. Except for any pledges to Denver Water Department, the
<br />BORROWER shall not sell, convey, assign, grant, transfer, mortgage, pledge, encumber, or
<br />otherwise dispose of the COLLATERAL for this loan, including the revenues pledged to repay
<br />the loan herein, so long as any of the principal, accrued interest, and late charges, if any, on
<br />this loan remain unpaid, without the prior written concurrence of the STATE, In the event of
<br />any such sale, transfer or encumbrance without the STATE'S written concurrence, the STATE
<br />may at any time thereafter declare all outstanding principal and interest on this loan
<br />immediately due and payable,
<br />
<br />11. Remedies for default. Upon default in the payments herein set forth to be made by the
<br />BORROWER, or default in the performance by the BORROWER of any covenant or agreement
<br />contained herein, the STATE, at its option, may:
<br />
<br />Chatfield South Water District
<br />
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