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<br />a. Revenues for this loan are to be kept separate. The BORROWER hereby pledges such
<br />revenues to repay the STATE loan. agrees that these revenues shall be set aside and kept in
<br />an account separate from other BORROWER revenues, warrants that these revenues shall not
<br />be used for any other purpose, and agrees to provide the STATE a perfected security interest
<br />such that the STATE has priority over all ott)er competing claims for such secured revenues.
<br />
<br />b. Establish security interest in the revenues. The BORROWER agrees that, in order to provide
<br />a security interest to the STATE irrevocably pledging such revenues, it shall provide completed
<br />and properly executed Uniform Commercial Code Security Agreement and Financing
<br />Statements, hereinafter referred to as UCC DOCUMENTS, attached as APPENDIX Band
<br />incorporated herein.
<br />
<br />c. UCC document renewal. The BORROW"R shall, within sixty (60) days prior to the end of
<br />the fifth year that this contract is in effect and every five (5) years thereafter, deliver to the
<br />STATE fully and properly executed Continuation Statements (Form UCC-3) of the UCC
<br />DOCUMENTS required by this contract.
<br />
<br />d. Assessments for repayment of the loar,. The BORROWER shall, pursuant to its statutory
<br />authority, articles of incorporation and by-laws, and as authorized by its resolutions, annually
<br />seek from its shareholders sufficient assessments, and take all other necessary actions
<br />consistent therewith to levy assessments sufficient to pay this contract loan in a timely
<br />manner and as required by the terms and c<:>nditions of this contract. Should the shareholders
<br />fail to set any such assessments, the BOI1ROWER shall make adequate assessments for the
<br />purpose of repaying its obligations under this contract pursuant to ~ 7-42-104(2). eR.S,
<br />(19B6). In addition, in the event the assessments levied by the BORROWER become insufficient
<br />to assure repayment to the STATE as required by the terms and conditions of this contract,
<br />then the BORROWER shall immediately take all necessary action consistent with its statutory
<br />authority, its articles of incorporation, by-laws and resolutions, including. but not limited to,
<br />levying additional assessments to raise sufficient revenue to assure repayment of the loan to
<br />the STATE.
<br />
<br />e. Assessments for operations, maintenllnce and reserves. The BORROWER shall, pursuant
<br />to its statutory authority, articles of incorpClration, by-laws, and resolutions, levy assessments
<br />from time to time as necessary to provide sufficient funds for adequate operation and
<br />maintenance, emergency repair services, obsolescence reserves and debt reserves. BORROWER
<br />shall deposit an amount equal to one-tentt) of an annual payment into its reserve debt service
<br />fund on an annual basis for the first ten years of this loan.
<br />
<br />11, Collateral. Part of the security provided for this loan shall be a security interest in an
<br />undivided one hundred percent interest in the following, hereinafter referred to as COLLATERAL: all
<br />revenues derived from the BORROWER'S sale of recharge water from the Sandhill Ditch Recharge
<br />Project to the Groundwater Appropriators of the South Platte River and/or to any other purchasers.
<br />The BORROWER has executed a Conditional Assignment of Contract Proceeds, attached as APPENDIX
<br />C and incorporated herein, assigning the STATE its right, title and interest in and to the income from
<br />the sales of recharge water to GASP pursuant to the BORROWER/GASP Agreement in the event of
<br />default by the BORROWER under this contract, and has executed a UCC DOCUMENT, referenced above,
<br />to convey to the STATE a security interest in all the revenues derived from sales of recharge water
<br />to GASP andlor to any other purchaser.
<br />
<br />12. Collateral during repayment. The BORROWER shall not sell, convey, assign, grant, transfer,
<br />mortgage, pledge, encumber. or otherwise dispose of any collateral for this loan, including the
<br />assessments and water sales revenues pledged to repay the loan herein, so long as any of the
<br />
<br />South Platte Ditch Company
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<br />Page 6 of 11
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<br />Loan Contract
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