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<br />,. <br /> <br />-,.' <br /> <br />,'''.''1 <br /> <br />;..""\ <br /> <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 any <br />loan funds. The BORROWER acknowledges that the STATE shall perfect its security interest <br />in the BORROWER'S right to receive assessment revenues by filing a UCC-1 Form with the <br />Colorado Secretary of State. <br /> <br />c. Assessments For Repayment Of The Loan. Pursuant to its statutory authority, articles of <br />incorporation and by-laws, and as authorized by its resolutions, the BORROWER shall take all <br />necessary actions consistent therewith to levy assessments sufficient to pay this loan as <br />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 the <br />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 of <br />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 />14. Change of Use of Water Shares During Term of Contract. The BORROWER agrees to <br />notify the STATE of.any change of the use of the water rights represented by its shares from <br />irrigation to municipal or commercial use, at which time the STATE shall adjust the interest rate <br />on that portion' of the outstanding loan amount corresponding to the percentage of shares for <br />which the use has been changed to the CWCB's municipal or commercial rate in effect at the <br />time of the change of use of the water rights. The parties shall execute a contract <br />amendment to effect said change in interest rate. <br /> <br />15. Remedies For Default. Upon default in the payments herein set forth to be made by the <br />BORROWER, or default in the performance of any covenant or agreement contained herein, the <br />STATE, at its option, may: <br /> <br />a. declare the entire principal amount and accrued interest then outstanding immediately due <br />and payable; <br /> <br />b. incur and pay reasonable expenses for repair, maintenance, and operation of the PROJECT <br />facilities herein described and such expenses as may be necessary to cure the cause of <br />default, and add the amount of such expenditures to the principal of the loan amount; <br /> <br />c. take possession of the PROJECT facilities, repair, maintain, and operate or lease them; <br /> <br />d. exercise its rights under the Promissory Note, Security Agreement, Assignment Of Deposit <br />Account As Security, and Deed Of Trust, <br /> <br />e. take any other appropriate action. <br /> <br />Left Hand Ditch Company <br /> <br />Page 7 of 13 <br /> <br />Loan Contract <br />