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<br />b. Establish Security Interest. The BORROWER agrees that, to provide a security interest
<br />to the CWCB in the Pledged Property so that the CWCB shall have priority over all other
<br />competing claims for said property, it shall execute a Security Agreement, attached
<br />hereto as Appendix 4, and incorporated herein. The CWCB shall perfect its security
<br />interest in the BORROWER'S right to receive assessment revenues by filing a UCC-1
<br />Form 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 bylaws, the BORROWER shall take all necessary actions consistent
<br />therewith to levy assessments sufficient to pay this loan as required by the terms of this
<br />contract and the Promissory Note. In the event the assessments levied by the
<br />BORROWER become insufficient to assure such repayment to the CWCB, the BORROWER
<br />shall immediately take all necessary action consistent with its statutory authority, its
<br />articles of incorporation and bylaws including, but not limited to, levying additional
<br />assessments to raise sufficient revenue to assure repayment of this loan.
<br />
<br />d. Assessments For Operations, Maintenance And Reserves. Pursuant to its statutory
<br />authority, articles of incorporation and bylaws, the BORROWER shall levy assessments in
<br />sufficient amounts to provide funds for adequate operation and maintenance,
<br />emergency repair services, and obsolescence and debt service reserves.
<br />
<br />e. Debt Service Reserve Account. To establish and maintain the debt service reserve
<br />account, the BORROWER shall deposit an amount equal to one-tenth of an annual
<br />payment into its debt service reserve fund on the due date of its first annual loan
<br />payment and annually thereafter for the first ten years of this loan. In the event that the
<br />BORROWER applies funds from this account to repayment of the loan, the BORROWER
<br />shall replenish the account within ninety (90) days of withdrawal of the funds.
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<br />7, Collateral. The collateral for this loan is described in Section 4 (Collateral) of the Project
<br />Summary. The BORROWER shall not sell, convey, assign, grant, transfer, mortgage,
<br />pledge, encumber, or otherwise dispose of the collateral for this loan, including the
<br />Pledged Property, so long as any of the principal, accrued interest, and late charges, if
<br />any, on this loan remain unpaid, without the prior written concurrence of the CWCB. In
<br />the event of any such sale, transfer or encumbrance without the CWCB's written
<br />concurrence, the CWCB may at any time thereafter declare all' outstanding principal,
<br />interest, and late charges, if any, on this IQan immediately due and payable.
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<br />8. Release After Loan Is Repaid. Upon complete repayment to the CWCB of the entire
<br />principal, all accrued interest, and late charges, if any, as specified in the Promissory Note,
<br />the CWCB agrees to release and terminate any and all of the CWCB's right, title, and
<br />interest in and to the collateral and the property pledged to repay this loan.
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<br />9. Warranties.
<br />
<br />a. The BORROWER warrants that, by accepting the loan money under this contract and by
<br />its representations herein, the BORROWER shall be estopped from asserting for any
<br />reason that it is not authorized or obligated to repay the loan to the CWCB as required
<br />by this contract.
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<br />Loan Contract
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