Common use of Warranties and Covenants of Borrower Clause in Contracts

Warranties and Covenants of Borrower. Borrower expressly warrants and covenants and agrees that: (a) Borrower is and will continue to be the owner of the Collateral free from any lien, security interest or encumbrance, other than that created by this Security Agreement; Borrower will defend the Collateral against all claims and demands of all other persons at anytime claiming the same or any interest therein; and Borrower will not sell the Collateral (except in the ordinary course of business) without the prior written consent of the Secured Party; (b) No effective financing statement covering any of the Collateral or any proceeds thereof is on file in any public office, and Borrower will not (except as provided herein) execute any financing statement affecting the Collateral during the term of this Security Agreement without the prior consent of the Secured Parties; (c) Borrower will pay the Indebtedness to Secured Parties as the same becomes due and payable; (d) Borrower will from time to time as required by Secured Parties authorize the filing of one or more financing statements pursuant to the Uniform Commercial Code of Colorado (and any assignments, extensions or modifications thereof) in form satisfactory to Secured Parties; (e) Borrower will pay all costs of filing any financing, continuation, assignment or termination statements with respect to the security interest created by this Security Agreement and hereby appoints Secured Parties its attorney-in-fact to do, at Secured Parties’ option and at Borrower’s expense, all acts and things which Secured Parties may deem necessary to perfect and continue perfected the security interest created by this Security Agreement; (f) Without the prior written consent of Secured Parties, Borrower will not voluntarily or involuntarily encumber, or agree to encumber any portion of the Collateral (including the replacement of such Collateral in the ordinary course of business), and in the event Secured Parties grant written consent for the establishment of another security interest in the Collateral, and with respect to the security agreements of record, Borrower will perform its obligations under those security agreements; (g) Borrower will pay as they become due all taxes or other liens or claims which may become a charge against the Collateral; (h) Borrower will insure the Collateral with companies and in amounts acceptable to Secured Parties, such amount being the full replacement value of the Collateral or the maximum amount the insurer will permit, against risks of theft, vandalism, fire and such other risks as are normally insured against, including standard extended coverage. All insurance policies shall be written for the benefit of Borrower and Secured Parties as their interests may appear, and the Secured Parties shall be named as loss payees on an endorsement to all insurance policies. All policies, endorsements and certificates evidencing the same shall be furnished to Secured Parties. All insurance policies shall provide for at least 10 days’ prior written notice of cancellation to Secured Parties; (i) Borrower will maintain the Collateral in good condition and repair, and Secured Parties may examine and inspect the Collateral at any reasonable time and wherever located; (j) Borrower may permit the Collateral to be removed from the State of Colorado in its normal and customary use, without the prior consent of Secured Parties; (k) Borrower will indemnify and hold the Secured Parties harmless from any and all loss, damage, injury or other casualty to persons or property caused or occasioned by the maintenance, operation and use of the Collateral by Borrower, its agents, invitees or employees; (l) Borrower will from time to time supply Secured Parties with a current list specifying the Collateral at the request of Secured Parties; (m) With respect to any Collateral to be purchased with monies advanced by Secured Parties to Borrower, this Security Agreement creates a purchase money security interest; (n) Borrower will execute and deliver such other and further instruments and will do such other and further acts as in the opinion of the Secured Parties may be necessary or desirable to carry out more effectually the purposes of this instrument, including, without limiting the generality of the foregoing: (i) prompt correction of any defect which may hereafter be discovered in the title to the Collateral or in the execution and acknowledgment of this Agreement, the Note, or the Loan Documents; and (ii) prompt execution and delivery of all other documents or instruments which in the opinion of the Secured Parties are needed to transfer effectually the Collateral or the proceeds or the Collateral to the Secured Parties. (o) Borrower is duly organized and validly existing as a limited liability company under the laws of the State of Colorado and the execution of this Agreement has been duly authorized and approved by its Managers and, if required, by its Members. Borrower has full power and authority to carry on its business as now being conducted with full power and authority to enter into this Agreement and effect the transactions contemplated to be effected by and under the terms of this Agreement; (p) There is no pending or threatened litigation, claim for infringement, proceeding or investigation by any governmental authority or any other person known to Borrower against or otherwise affecting Borrower or any of its assets or its officers, partners, directors or agents in their capacities as such, nor does the Borrower know of any ground for any such litigation, infringement claims, proceedings or investigations; (q) No contract or organizational document prohibits any term or condition of the security agreement; (r) The execution and delivery of this Security Agreement and the Notes will not violate any law or agreement governing the Borrower or to which the Borrower is a party; (s) All information and statements furnished in connection with the Notes, this Security Agreement and the Loan Documents are true and correct, and contain no false or misleading statements; (t) Borrower acknowledges that Lenders will enter into an Agreement Among Lenders pursuant to which Lenders may appoint an agent to act on their behalf (the “Agent”). A copy of the Agreement Among Lenders shall be provided to Borrower. Borrower, upon receiving written notice signed by Secured Parties who hold a majority of the outstanding principal balance of the Notes that an Agent has been appointed on their behalf, shall acknowledge and accept the Agent’s authority to act on behalf of the Secured Parties in accordance with the Agreement Among Lenders; and (u) Borrower will not take any action that has the effect of favoring one Secured Party over any other Secured Party. Without limitation, Borrower will not make any payment under the Notes or amend or modify its obligations under the Notes except on a pro rata basis with respect to all Lenders.

Warranties and Covenants of Borrower. 1.1 Borrower expressly represents, warrants and covenants and agrees thatas follows: (a) All information set forth in Borrower's loan application and in all statements given to Bank by Borrower in connection with the Loan is true, correct and complete in all material respects; b) The Note, Security Agreement, Deed of Trust and this Agreement together with any Related Documents, are in all respects legal, valid and binding upon Borrower and enforceable according to their terms and grant to Bank direct, valid and enforceable liens upon and security interests in the Property and the Improvements, now located or to be located on the Property; c) Borrower is and will continue to be the owner of the Collateral free from any lien, security interest or encumbrance, other than that created by this Security Agreement; Borrower will defend the Collateral against all claims and demands of all other persons at anytime claiming the same or any interest therein; and Borrower will not sell the Collateral (except in the ordinary course of business) without the prior written consent of the Secured Party; (b) No effective financing statement covering any of the Collateral or any proceeds thereof is on file in any public office, and Borrower will not (except as provided herein) execute any financing statement affecting the Collateral during the term of this Security Agreement without the prior consent of the Secured Parties; (c) Borrower will pay the Indebtedness to Secured Parties as the same becomes due and payable; (d) Borrower will from time to time as required by Secured Parties authorize the filing of one or more financing statements pursuant to the Uniform Commercial Code of Colorado (and any assignments, extensions or modifications thereof) in form satisfactory to Secured Parties; (e) Borrower will pay all costs of filing any financing, continuation, assignment or termination statements with respect to the security interest created by this Security Agreement and hereby appoints Secured Parties its attorney-in-fact to do, at Secured Parties’ option and at Borrower’s expense, all acts and things which Secured Parties may deem necessary to perfect and continue perfected the security interest created by this Security Agreement; (f) Without the prior written consent of Secured Parties, Borrower will not voluntarily or involuntarily encumber, or agree to encumber any portion of the Collateral (including the replacement of such Collateral in the ordinary course of business), and in the event Secured Parties grant written consent for the establishment of another security interest in the Collateral, and with respect to the security agreements of record, Borrower will perform its obligations under those security agreements; (g) Borrower will pay as they become due all taxes or other liens or claims which may become a charge against the Collateral; (h) Borrower will insure the Collateral with companies and in amounts acceptable to Secured Parties, such amount being the full replacement value of the Collateral or the maximum amount the insurer will permit, against risks of theft, vandalism, fire and such other risks as are normally insured against, including standard extended coverage. All insurance policies shall be written for the benefit of Borrower and Secured Parties as their interests may appear, and the Secured Parties shall be named as loss payees on an endorsement to all insurance policies. All policies, endorsements and certificates evidencing the same shall be furnished to Secured Parties. All insurance policies shall provide for at least 10 days’ prior written notice of cancellation to Secured Parties; (i) Borrower will maintain the Collateral in good condition and repair, and Secured Parties may examine and inspect the Collateral at any reasonable time and wherever located; (j) Borrower may permit the Collateral to be removed from the State of Colorado in its normal and customary use, without the prior consent of Secured Parties; (k) Borrower will indemnify and hold the Secured Parties harmless from any and all loss, damage, injury or other casualty to persons or property caused or occasioned by the maintenance, operation and use of the Collateral by Borrower, its agents, invitees or employees; (l) Borrower will from time to time supply Secured Parties with a current list specifying the Collateral at the request of Secured Parties; (m) With respect to any Collateral to be purchased with monies advanced by Secured Parties to Borrower, this Security Agreement creates a purchase money security interest; (n) Borrower will execute and deliver such other and further instruments and will do such other and further acts as in the opinion of the Secured Parties may be necessary or desirable to carry out more effectually the purposes of this instrument, including, without limiting the generality of the foregoing: (i) prompt correction of any defect which may hereafter be discovered in the title to the Collateral or in the execution and acknowledgment of this Agreement, the Note, or the Loan Documents; and (ii) prompt execution and delivery of all other documents or instruments which in the opinion of the Secured Parties are needed to transfer effectually the Collateral or the proceeds or the Collateral to the Secured Parties. (o) Borrower is CORPORATION duly organized formed and validly existing as a limited liability company under the laws of the State of Colorado DELAWARE; d) The Loan is made with full recourse to the Borrower who shall be liable for the payment of the Loan and the execution performance of this Agreement has been duly authorized the duties and approved by its Managers andobligations of the Borrower under the Loan Documents; e) Borrower shall, if requiredupon written request from Bank, by its Members. provide Bank with financial statements of Borrower has full power and authority to carry on its business as now being conducted with full power and authority to enter into this Agreement and effect the transactions contemplated shall cause, to be effected by and under the terms delivered to Bank financial statements of this AgreementBorrower; (pf) There is are no actions, suits or proceedings pending or to the knowledge of Borrower threatened litigationagainst or affecting it, claim for infringementthe Property, proceeding or investigation the Improvements or involving the validity or enforceability of any of the Loan Documents or the priority of the liens thereof, at law or in equity, or before or by any governmental authority authority, and Borrower is not in default with respect to any order, writ, injunction, decree or demand or any other person known to court or any governmental authority. Borrower shall hereafter inform Bank in writing immediately after Borrower acquires knowledge thereof of any litigation threatened or instituted against or otherwise affecting Borrower or any Improvements, the financial condition of its assets Borrower, or its officersBorrower's ability to repay the indebtedness hereunder, partners, directors and at Bank's request will furnish to Bank a written summary of all such litigation; g) Borrower has no knowledge or agents in their capacities as such, nor does the Borrower know notice of any ground for violation of any such litigationlaw, infringement claimsincluding any environmental regulations or of any requirement of the State of Arizona or any municipal department or other governmental authority, proceedings which violation in any way materially relates to or investigationsaffects the Property or the Improvements; (q) No contract or organizational document prohibits any term or condition of the security agreement; (rh) The execution and delivery Loan proceeds will be used by Borrower solely for the purposes of this Security Agreement and (1) $750,000.00 to pay off existing Development Line of Credit at Xxxxx Fargo Bank with the Notes will not violate assurance that any law or agreement governing the Borrower or to which the Borrower is a party; (s) All information and statements furnished remaining balance due in connection with the NotesXxxxx Fargo Credit Facility will be cleared to zero concurrently; and (2) $250,000.00 to be reserved for the completion of onsite and offsite improvements in accordance with plans and specifications approved by the City of PRESCOTT for the YAVAPAI HILLS SUBDIVISION, this Security Agreement Xxxx 0, Xxxxx 0 in PRESCOTT, AZ.; i) Except for sales of individual lots contained within the Property in the ordinary course of business, Borrower shall not at any time sell, convey, assign, lease with option of sale or dispose of all or part of the Property or Improvements or otherwise transfer the Property or Improvements, in whole or in part, to any other party; j) Borrower shall at all times keep accurate and complete books, records and accounts with respect to all of Borrower's business activities, such books, records and accounts to be maintained at Borrower's principal place of business; k) All utility services necessary for the construction of the Improvements and the Loan Documents operation thereof are true available on the Property or will be made available during construction, including water supply, storm and correctsanitary sewer facilities, and contain no false or misleading statementselectric and telephone facilities, and Borrower will obtain all necessary permits and permissions required from all governmental authorities for access to and use of such services in connection with operation of the Improvements prior to their construction; (tl) Borrower acknowledges that Lenders will enter into an Agreement Among Lenders pursuant to which Lenders may appoint an agent to act on their behalf (All permits required for the “Agent”). A copy construction of the Agreement Among Lenders shall be provided to Borrower. Borrower, upon receiving written notice signed by Secured Parties who hold a majority of the outstanding principal balance of the Notes that an Agent has been appointed on their behalf, shall acknowledge and accept the Agent’s authority to act on behalf of the Secured Parties Improvements in accordance with the Agreement Among LendersPlans and Specifications have been or will be obtained prior to the commencement of construction of that portion of the Improvements for which they are required. Borrower shall immediately deliver copies of all such permits to Bank; and (um) Borrower will shall at all times maintain policies of insurance providing general liability coverages for Borrower and General Contractor in an amount not take any action that has the effect of favoring one Secured Party over any other Secured Party. Without limitation, Borrower will not make any payment under the Notes or amend or modify its obligations under the Notes except on a pro rata basis with respect to all Lendersless than $**2,000,000.00**.

Warranties and Covenants of Borrower. Borrower expressly warrants and covenants and agrees that: (a) The Borrower and each of its subsidiaries are corporations or limited liability companies duly organized and validly existing in good standing under the laws of the jurisdiction in which they are incorporated or formed, and have the requisite corporate power to own their properties and to carry on their business as now being conducted. Each of the Borrower and its subsidiaries is duly qualified as a foreign corporation or limited liability company to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Borrower and its subsidiaries taken as a whole. (b) The Borrower has the requisite corporate power and authority to enter into and perform this Agreement and the Note, (ii) the execution and delivery of this Agreement and the Notes by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by the Borrower’s Board of Directors and no further consent or authorization is required by the Borrower, its Board of Directors or its stockholders, (iii) this Agreement and the Notes have been duly executed and delivered by the Borrower, (iv) this Agreement and the Notes constitute the valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies. (c) Except for the security interests held by FCC, LLC, d/b/a First Capital and First National Bank (together with any other lender refinancing all or any of the indebtedness of Borrower to any of the foregoing, the “Senior Lenders” and “Senior Liens”) given to secure Borrower’s indebtedness to the Senior Lenders (together with any refinancing of any of the foregoing, the “Senior Loans”), which during the term hereof may be replaced by substitute senior lenders, and except for the interests and liens of equipment lessors on leased equipment, Borrower is and will continue to be the owner of the Collateral free from any lien, security interest or encumbrance, other than that created by this Security Agreement; Borrower will defend the Collateral against all claims and demands of all other persons at anytime claiming the same or any interest therein; and Borrower will not sell the Collateral (except in the ordinary course of business) without the prior written consent of the Secured Party; (bd) No Except for the Senior Liens, no effective financing statement covering any of the Collateral or any proceeds thereof is on file in any public office, and Borrower will not (except as provided herein) execute any financing statement affecting the Collateral or any assets of any of the Borrower’s wholly-owned or partially-owned subsidiaries during the term of this Security Agreement without the prior consent of the Secured PartiesParty; (ce) The execution, delivery and performance of this Agreement and the Notes by the Borrower will not (i) result in a violation of the Articles of Incorporation, any certificate of designations of any outstanding series of preferred stock of the Borrower or its by-laws or (ii) except as set forth herein, conflict with or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Borrower or any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Borrower or any of its subsidiaries or by which any property or asset of the Borrower or any of its subsidiaries is bound or affected. Notwithstanding the foregoing, the execution and delivery of this Agreement may constitute an event of default under the Borrower’s agreements with its Senior Lenders, which will be required to consent to this Agreement. (f) To its knowledge, and except as disclosed in the Borrower’s reports filed with the Securities and Exchange Commission (“SEC Documents”) or otherwise disclosed in its Confidential Private Placement Memorandum dated as of March 15, 2010 (the “PPM”) (collectively the “Disclosure Documents”), neither the Borrower nor any of its subsidiaries is in violation of any term of or in default under its Articles of Incorporation or By-laws or their organizational charter or by-laws, respectively, or any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Borrower or its subsidiaries. (g) The business of the Borrower and of each of its subsidiaries is not being conducted, and shall not be conducted in violation of any material law, ordinance, or regulation of any governmental entity. (h) Borrower will pay the Indebtedness to Secured Parties Lenders as the same becomes due and payable; (di) Borrower will from time to time as required by Secured Parties Party authorize the filing of one or more financing statements pursuant to the Uniform Commercial Code of Colorado (and any assignments, extensions or modifications thereof) in form satisfactory to Secured PartiesParty; (ej) Borrower will pay all costs of filing any financing, continuation, assignment or termination statements with respect to the security interest created by this Security Agreement and hereby appoints Secured Parties Party its attorney-in-fact to do, at Secured Parties’ Party’s option and at Borrower’s expense, all acts and things which Secured Parties Party may deem necessary to perfect and continue perfected the security interest created by this Security Agreement; (fk) Without the prior written consent of Secured PartiesParty, except for liens and interests granted and existing on the date hereof (and liens and interests created in substitution of such interests), Borrower will not (i) voluntarily or involuntarily encumber, or agree to encumber any portion of the Collateral (including the replacement of such Collateral in the ordinary course of business), or (ii) borrow, or cause or permit any of its subsidiaries to borrow, money from any person or entity (except for credit facilities existing on the date hereof or undertaken in substitution of those facilities), except the Borrower for which each subsidiary posts collateral with a fair market value greater than the amount of the borrowings, or (iii) cause or permit any of its subsidiaries to encumber any of such subsidiary’s assets for any purpose except for loans such subsidiary receives from the Borrower; or (iv) cause or permit any of its subsidiaries to issue any shares of its capital stock or debt securities to any person; and in the event Secured Parties grant Party grants written consent for the establishment of another security interest in the CollateralCollateral or any assets of any subsidiary, and with respect to the security agreements of record, Borrower will perform (and will cause each subsidiary to perform) its obligations under those security agreements; (gl) Borrower will pay as they become due all taxes or other liens or claims which may become a charge against the Collateral; (hm) Borrower will insure the Collateral with companies and in amounts acceptable to Secured PartiesParty, such amount being the full replacement value of the Collateral or the maximum amount the insurer will permit, against risks of theft, vandalism, fire and such other risks as are normally insured against, including standard extended coverage. All insurance policies shall be written for the benefit of Borrower and Secured Parties Party as their interests may appear, and the Secured Parties Party shall be named as loss payees payee on an endorsement to all insurance policies. All policies, endorsements and certificates evidencing the same shall be furnished to Secured PartiesParty. All insurance policies shall provide for at least 10 days’ prior written notice of cancellation to Secured PartiesParty; (in) Borrower will maintain the Collateral in good condition and repair, and Secured Parties Party may examine and inspect the Collateral at any reasonable time and wherever located; (jo) Borrower may permit the Collateral to be removed from the State of Colorado in its normal and customary use, without the prior consent of Secured PartiesIntentionally omitted; (kp) Borrower will indemnify and hold the Secured Parties Party harmless from any and all loss, damage, injury or other casualty to persons or property caused or occasioned by the maintenance, operation and use of the Collateral by Borrower, its agents, invitees or employees; (lq) Borrower will from time to time supply Secured Parties Party with a current list specifying the Collateral at the request of Secured PartiesParty; (mr) With respect to any Collateral to be purchased with monies advanced by Secured Parties Party to Borrower, this Security Agreement creates a purchase money security interest; (ns) Borrower will execute and deliver such other and further instruments and will do such other and further acts as in the opinion of the Secured Parties Party may be necessary or desirable to carry out more effectually the purposes of this instrument, including, without limiting the generality of the foregoing: (i) prompt correction of any defect which may hereafter be discovered in the title to the Collateral or in the execution and acknowledgment of this Agreement, the Note, or the Loan Documents; and (ii) prompt execution and delivery of all other documents or instruments which in the opinion of the Secured Parties Party are needed to transfer effectually the Collateral or the proceeds or the Collateral to the Secured PartiesParty. (ot) Borrower is duly organized and validly existing Except as a limited liability company under disclosed in the laws of the State of Colorado and the execution of this Agreement has been duly authorized and approved by its Managers andDisclosure Documents, if required, by its Members. Borrower has full power and authority to carry on its business as now being conducted with full power and authority to enter into this Agreement and effect the transactions contemplated to be effected by and under the terms of this Agreement; (p) There there is no pending or threatened litigation, claim for infringement, proceeding or investigation by any governmental authority or any other person known to Borrower against or otherwise affecting Borrower or any of its assets or its officers, partners, directors or agents in their capacities as such, nor does the Borrower know of any ground for any such litigation, infringement claims, proceedings or investigations; (qu) No Except as disclosed in the Disclosure Documents, no contract or organizational document prohibits any term or condition of the security agreement; (rv) The Except as disclosed in the Disclosure Documents, the execution and delivery of this Security Agreement and the Notes will not violate any law or agreement governing the Borrower or to which the Borrower is a party; (sw) All information and statements furnished in connection with the Notes, this Security Agreement and the Loan Documents are true and correctcorrect in all material respects, and contain no false or misleading statements; (tx) Borrower acknowledges that Lenders have entered or will enter into an a Collateral Agent Agreement Among Lenders pursuant to which Lenders may appoint an [Placement Agent] as agent to act on their behalf (the “Agent”)behalves. A copy of the Collateral Agent Agreement Among Lenders shall be has been provided to Borrower. Borrower, upon receiving written notice signed by Secured Parties who hold a majority of Borrower accepts the outstanding principal balance of the Notes that an Agent has been appointed on their behalf, shall acknowledge and accept the Collateral Agent’s authority to act on behalf of the Secured Parties Lenders, as defined in the Collateral Agent Agreement, in accordance with the Agreement Among LendersCollateral Agent Agreement; and (uy) Borrower will not take any action that has the effect of favoring one Secured Party Lender over any other Secured PartyLender. Without limitation, Borrower will not make any payment under the Notes or amend or modify its obligations under the Notes except on a pro rata basis with respect to all Lenders.

Warranties and Covenants of Borrower. Borrower expressly warrants and hereby makes the following warranties, covenants and agrees agreement which will remain in effect until otherwise hereinafter agreed in writing between Borrower and Lender or the holder of the Promissory Note, or until the indebtedness and obligations of Borrower to Lender have been fully paid and performed whichever shall occur first. Borrower warrants that: (a) a. Borrower is has procured and will continue to be now possesses all the owner of the Collateral free from any lienqualifications, security interest or encumbranceauthorizations, other than that created by this Security Agreement; Borrower will defend the Collateral against all claims licenses and demands of all other persons at anytime claiming the same or any interest therein; and Borrower will not sell the Collateral (except in the ordinary course of business) without the prior written consent of the Secured Party; (b) No effective financing statement covering any of the Collateral or any proceeds thereof is on file in any public office, and Borrower will not (except as provided herein) execute any financing statement affecting the Collateral during the term of this Security Agreement without the prior consent of the Secured Parties; (c) Borrower will pay the Indebtedness to Secured Parties as the same becomes due and payable; (d) Borrower will from time to time as permits required by Secured Parties authorize the filing of one or more financing statements pursuant to the Uniform Commercial Code of Colorado (and any assignmentslaw, extensions or modifications thereof) in form satisfactory to Secured Parties; (e) Borrower will pay all costs of filing any financing, continuation, assignment or termination statements with respect to the security interest created by this Security Agreement and hereby appoints Secured Parties its attorney-in-fact to do, at Secured Parties’ option and at Borrower’s expense, all acts and things which Secured Parties may deem necessary to perfect and continue perfected the security interest created by this Security Agreement; (f) Without the prior written consent of Secured Parties, Borrower will not voluntarily or involuntarily encumber, or agree to encumber any portion of the Collateral (including the replacement of such Collateral in the ordinary course of business), and in the event Secured Parties grant written consent for the establishment of another security interest in the Collateral, and with respect to the security agreements of record, Borrower will perform its obligations under those security agreements; (g) Borrower will pay as they become due all taxes ordinance or other liens or claims which may become a charge against the Collateral; (h) Borrower will insure the Collateral with companies and governmental regulation in amounts acceptable to Secured Parties, such amount being the full replacement value of the Collateral or the maximum amount the insurer will permit, against risks of theft, vandalism, fire and such other risks as are normally insured against, including standard extended coverage. All insurance policies shall be written for the benefit of Borrower and Secured Parties as their interests may appear, and the Secured Parties shall be named as loss payees on an endorsement to all insurance policies. All policies, endorsements and certificates evidencing the same shall be furnished to Secured Parties. All insurance policies shall provide for at least 10 days’ prior written notice of cancellation to Secured Parties; (i) Borrower will maintain the Collateral in good condition and repair, and Secured Parties may examine and inspect the Collateral at any reasonable time and wherever located; (j) Borrower may permit the Collateral to be removed from the State of Colorado in its normal and customary use, without the prior consent of Secured Parties; (k) Borrower will indemnify and hold the Secured Parties harmless from any and all loss, damage, injury or other casualty to persons or property caused or occasioned by the maintenance, operation and use of the Collateral by Borrower, its agents, invitees or employees; (l) Borrower will from time to time supply Secured Parties with a current list specifying the Collateral at the request of Secured Parties; (m) With respect to any Collateral to be purchased with monies advanced by Secured Parties to Borrower, this Security Agreement creates a purchase money security interest; (n) Borrower will execute and deliver such other and further instruments and will do such other and further acts as in the opinion of the Secured Parties may be necessary or desirable to carry out more effectually the purposes of this instrument, including, without limiting the generality of the foregoing: (i) prompt correction of any defect which may hereafter be discovered in the title to the Collateral or in the execution and acknowledgment of this Agreement, the Note, or the Loan Documents; and (ii) prompt execution and delivery of all other documents or instruments which in the opinion of the Secured Parties are needed to transfer effectually the Collateral or the proceeds or the Collateral to the Secured Parties. (o) Borrower is duly organized and validly existing as a limited liability company under the laws of the State of Colorado and the execution of this Agreement has been duly authorized and approved by its Managers and, if required, by its Members. Borrower has full power and authority order to carry on its business as in the manner, in the location, and to the extent now being conducted with full conducted. b. Borrower has the power and authority to enter into this Loan Agreement and effect the transactions contemplated to be effected by and under the terms of execute all other documents in relation to this Agreement;loan. (p) c. There is are no actions at law or in equity in any state or Federal Court or regulatory or administrative agency pending or to the best of the knowledge or belief of Borrower which are threatened litigationagainst Borrower; similarly, claim for infringementthere are no administrative actions, proceeding investigations, or investigation proceedings of any kind or nature to the best of the knowledge and belief of Borrower threatened against Borrower by any Federal, state or local governmental or administrative authority or agency nor are there outstanding any other person known to orders of any such administrative authority or agency limiting Borrower against or otherwise affecting Borrower or any in the operation of its assets or its officers, partners, directors or agents in their capacities as such, nor does the Borrower know of any ground for any such litigation, infringement claims, proceedings or investigations;business. (q) No contract or organizational document prohibits any term or condition of the security agreement; (r) The execution and delivery of this Security Agreement and the Notes will not violate any law or d. This agreement governing the Borrower or to which the Borrower is a party; (s) All information and statements furnished in connection with the Notes, this Security Agreement and the Loan Documents are true and correct, and contain no false or misleading statements; (t) legal binding obligation of Borrower acknowledges that Lenders will enter into an Agreement Among Lenders pursuant to which Lenders may appoint an agent to act on their behalf (the “Agent”). A copy of the Agreement Among Lenders shall be provided to Borrower. Borrower, upon receiving written notice signed by Secured Parties who hold a majority of the outstanding principal balance of the Notes that an Agent has been appointed on their behalf, shall acknowledge and accept the Agent’s authority to act on behalf of the Secured Parties enforceable in accordance with its terms against Borrower. e. The Note, Mortgage and related instruments that may be delivered to Lender by Borrower pursuant to this Agreement when duly executed and delivered will be legal and binding obligations of Borrower and enforceable in accordance with their terms. f. Borrower shall not create, incur, assume or permit any new deed of trust, pledge, lien, security interest, or other encumbrance of any nature on the Agreement Among Lenders; andproperty. g. Borrower shall maintain, preserve and keep the property in good operating condition and repair, will promptly pay and discharge and cause to be paid and discharged any and all lawful taxes and assessments upon its property and shall at all times keep or cause to be kept in force a policy or policies of insurance with good and responsible insurance companies satisfactory to Lender for fire and extended coverage and other hazards on the property to the extent of the fair market value thereof with a loss payable clause in favor of Lender as its interests may appear. Lender will be furnished as of this date an insurance policy for one (u1) Borrower will not take any action that year which has been paid prior to closing by Borrower. In addition to the effect of favoring one Secured Party over any other Secured Party. Without limitationhazard insurance, Borrower shall furnish Lender evidence of public liability insurance in an amount satisfactory to Lender. h. Borrower shall maintain at all times its existence and authority to do business in good standing with all governmental entities and regulatory agencies now or in the future having jurisdiction or supervisory responsibilities for Borrower or the type of business operations it conducts in full compliance in all material respects with all statutory requirements, governmental ordinances relating to the operation of Borrower's business at all present or future locations and in possession of all up to date licenses, permits and other authorizations necessary for Borrower to lawfully conduct such operations. i. Borrower covenants that it will not make any payment under comply with all requests by Lender for information or documentation as may be requested by the Notes or amend or modify its obligations under Lender from time to time during the Notes except on a pro rata basis with respect to all Lenderslife of this loan.