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<br />SECURITY AGREEMENT <br /> <br />DEBTOR: <br /> <br />City of Loveland, Colorado, Water Enterprise <br />200 North Wilson Ave. <br />Loveland, Colorado 80537 <br /> <br />84-6000609 <br /> <br />FEDERAL ID No: <br />SECURi':D PARTY: <br /> <br />State of Colorado - Colorado Water Conservation Board <br />1313 Sherman Street, Room 721 <br />Denver, CO 80203 <br /> <br />COLLATERAL: CONTRACT RIGHTS (Code: 030) <br /> <br />COUNTY: Larimer (Code: 51) <br /> <br />DEBTOR, for consideration, hereby grants to SECURED PARTY a security interest in the following property and <br />any and all additions, accessions and substitutions thereto or therefor, hereinafter called the COLLATERAL: <br />Water system revenues pledged to repay the amount loaned to DEBTOR by SECURED PARTY, as described in <br />the Pledge of Revenues Provisions contained in Loan Contract No. C150005 (CONTRACT). <br /> <br />To secure payment of the indebtedness evidenced by certain Promissory Note which is a part of CONTRACT <br />between the above named parties herewith, payable to the SECURED PARTY, the loan amount of $5,000,000 <br />with interest at a rate of 4.45% per annum, payable in 10 annual installments or until all principal, interest, and <br />late charges, if any, are paid in full, in accordance with ~romissory Note. <br /> <br />DEBTOR EXPRESSLY WARRANTS AND COVIta...~Y <br /> <br />1. That, except for the security interest gQ~y, curity interest granted in the ordiancne <br />authorizing the issuance of the City's Ta"le Ge I ion Water Refunding Bonds, Series 1994, <br />DEBTOR is, or to the extent that this agreemelJt s he COLLATERAL is to be acquired after the date <br />hereof, will be, the owner of the COLLATE e any adverse lien, security interest or encumbrances; <br />and that DEBTOR will defend the COL . gainst all claims and demands of all persons at anytime <br />claiming the same or any interest therein. <br /> <br />2. That the execution and delivery of this agreement by DEBTOR will not violate any law or agreement <br />governing DEBTOR or to which DEBTOR is a party. . <br /> <br />3. That, if DEBTOR is a corporation, its certificate and articles of incorporation and by-laws do not prohibit any <br />term or condition of this agreement. . ,.)1. .... <br /> <br />4. That by its acceptance of the loan money pursuant to the terms of the CONTRACT and byit~Hepresentations <br />herein, DEBTOR shall be estopped from asserting for any reason that it is not authorized to gr~~~ ?'security <br />interest in the COLLATERAL pursuant to the terms of this agreement. . ".~~' . ~ <br />'.,7" ,"H" '~,,' <br />5. To pay all taxes and assessments of every nature which may be levied o(tJs~~~~(f against the <br />COLLATERAL. " ;'.' <br /> <br />6. To not permit or allow any other adverse lien, security interest or encumbrance whatsoever upon the <br />COLLATERAL and not to permit the same to be attached or replevined, except as provided in the CONTRACT. <br /> <br />7. That the DEBTOR will not use the COLLATERAL in violation of any applicable statutes, regulations, <br />ordinances, articles of incorporation or by-laws. <br /> <br />UNTIL DEFAULT DEBTOR may have possession of the COLLATERAL, provided that DEBTOR keeps the <br />COLLATERAL in an account separate from other revenues of DEBTOR and does not use the COLLATERAL for any <br /> <br />Appendix 4 to Loan Contract No. C150005 <br />