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<br />. " <br /> <br />and a Conditional Assignment of Contract Proceeds, attached as Appendix 5 and <br />Appendix 6, respectively, and incorporated herein, to convey a security interest in said <br />income to the STATE. The BORROWER acknowledges that the STATE shall perfect its <br />security interest in the BORROWER'S right to receive said income by filing a UCC-1 Form <br />with the Colorado Secretary of State. <br /> <br />13. Pledge Of Property. The BORROWER herel:>Y irrevocably pledges to the STATE for purposes <br />of repayment of this loan revenues from assessments in the amount required for annual/oan <br />payments as authorized by the BORROWER'$ resolution, and all of the BORROWER'S rights to <br />receive said assessment revenues from its stockholders (hereinafter collectively referred to <br />as the .pledged property"). Furthermore, BO~ROWER agrees that <br /> <br />a. Revenues For This Loan Are To Be !<ept Separate. The BORROWER hereby agrees <br />that the pledged revenues shall be set aside 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 prol)erty 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 7 and incorporated herein prior to the disbursement of any loan <br />funds, and it shall provide an executed ,ASsignment of Deposit Account as Security in the <br />form attached as Appendix 8 and incorporated herein at the time the STATE determines <br />that the PROJECT is substantially complett9d. The BORROWER acknowledges that the STATE <br />shall perfect its security interest in the BORROWER'S right to receive assessment revenues <br />by filing a UCC-1 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 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 co(ltract and the promissory note. In the event the <br />assessments levied by the BORROWER I:>ecome insufficient to assure such repayment to <br />the STATE, the BORROWER shall immediciltely take all necessary action consistent with its <br />statutory authority, its articles of incorporation, bylaws and resolutions, 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 ReseNes. 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. Collateral During Repayment. The BORROWER shall not sell, convey, assign, grant, <br />transfer, mortgage, pledge, encumber, or otherwise dispose of any of the property provided <br />as security for this loan, including the assessment revenues pledged herein to repay the <br /> <br />The Agricultural Ditch and Reservoir Company <br /> <br />Page 7 of 14 <br /> <br />Loan Contract <br />