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<br />be replenished by the BORROWER within sixty days after such withdrawal. The STATE shall <br />not disburse any loan funds under this contract until the BORROWER has established the CD <br />ACCOUNT. <br /> <br />13. Collateral During Repayment. The BORROWER shall not sell, convey, assign, grant, <br />transfer, mortgage, pledge, encumber, or otherwise dispose of the CD ACCOUNT provided as <br />security for this loan, or any of the dues/assessment revenues pledged to repay the loan <br />herein, so long as any of the principal and any accrued interest on this loan which remain <br />unpaid, without the prior written concurrence of the STATE. <br /> <br />14. Pledge Of Property. The BORROWER hereby irrevocably pledges to the STATE for purposes <br />of repayment of this loan revenues from annual dues and from assessments levied for that <br />purpose as authorized by the BORROWER'S resolution, and all of the BORROWER'S rights to <br />receive said dues and assessment revenues from its members (hereinafter collectively <br />referred to as the "pledged property"). Furthermore, BORROWER agrees that <br /> <br />a. Revenues For This Loan Are To Be Kept Separate. The BORROWER hereby agrees <br />that the pledged revenues shall be set a$ide and kept in an account separate from other <br />BORROWER revenues, and warrants that these revenues shall not be used for any other <br />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 il'1corporated 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 cOl'1tract and the promissory note. In the event the <br />assessments levied by the BORROWER become insufficient to assure such repayment to <br />the STATE, the BORROWER shall immediately take all necessary action consistent with its <br />statutory authority, its articles of incorporation, bylaws and resolution, including, but not <br />limited to, levying additional assessments to raise sufficient revenue to assure repayment <br />of the loan to the 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 on an annual basis for the first ten years of this <br />loan. <br /> <br />Chipperfield Lane Ditch, Inc. <br /> <br />Page 7 of 14 <br /> <br />Loan Contract ~ <br />