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<br />STATE OF COLORADO
<br />UNIFORM COMMERCIAL CODE - SECURITY AGREEMENT & FINANCING STATEMENT
<br />COLORADO SECRETARY OF STATE
<br />1560 Broadway, Suite 200 - Denver, CO 80202 -5169
<br />DEBTOR: CARYL R. CARROLL COF11
<br />P. 0. Box 219 tt��..Fi
<br />Cocoa, Florida 32923- 02�'"
<br />FED TAX ID# 59- 2878382
<br />SECURED PARTY: STATE OF COLORADO for the use and benefit of
<br />The Department of Natural Resources, Colorado Water Conservation Board
<br />1313 Sherman Street, Room 721
<br />Denver, CO 80203
<br />COLLATERAL 962)U0 0.2 981 C: $16. 010
<br />CLASSIFICATION: _X_ CONTRACT RIGHTS _X_ OTHER
<br />ER`r.jF c;
<br />01 -ii 10 11 :06
<br />DEBTOR, for consideration, hereby grants to SECURED PARTY a security interest in the following property and any and all additions, accessions
<br />and substitutions thereto or therefor, hereinafter called the COLLATERAL: Borrower's interest in 703.9 acre -feet of water rights adjudicated
<br />to the DD &E Reservoir, decreed as follows: an undivided 200.4 acre -feet adjudicated 10/26/1931, priority 43A , and an undivided 503.5
<br />acre -feet adjudicated 9/1/1960, priority 7, all of which is located in S2 & S3, T2N R92W 6PM, Rio Blanco County, State of Colorado.
<br />To secure payment of the indebtedness evidenced by certain Promissory Note Provisions of Loan Contract #C153682, dated August 22,
<br />1994, as amended, between the above named parties herewith, payable to the SECURED PARTY, or order, as follows: the total amended
<br />principal amount of $75,000, the first $50,000 accruing interest at the rate of 2 %, and the remaining $25,000 accruing interest at the rate
<br />of 3.75 %, both amounts payable in 20 annual installments.
<br />DEBTOR EXPRESSLY WARRANTS AND COVENANTS:
<br />1. That except for the security interest granted hereby DEBTOR is, or to the extent that this agreement states that the COLLATERAL
<br />is to be acquired after the date hereof, will be, the owner of the COLLATERAL free from any adverse lien, security interest or encumbrances;
<br />and that DEBTOR will defend the COLLATERAL against all claims and demands of all persons at anytime claiming the same or any interest
<br />therein.
<br />2. The COLLATERAL is used or bought primarily for:
<br />_ Personal, family or household purposes;
<br />X Use in farming operations;
<br />_ Use in business;
<br />X Other.
<br />3. That DEBTOR'S address is as stated above, and the COLLATERAL will be kept at the above address.
<br />4. If any of the COLLATERAL is crops, oil, gas or minerals to be extracted or timber to be cut, or goods which are or are to become
<br />fixtures, said COLLATERAL concerns the following described real estate situate in the County of Rio Blanco and State of Colorado, to -wit: N/A
<br />5. Promptly to notify SECURED PARTY of any changes in the location of the COLLATERAL.
<br />6. To pay all taxes and assessments of every nature which may be levied or assessed against the COLLATERAL.
<br />7. To not permit or allow any adverse lien, security interest or encumbrance whatsoever upon the COLLATERAL and not to permit the
<br />same to be attached or replevined.
<br />8. That the COLLATERAL is in good condition, and that the DEBTOR will, at its own expense, keep the same in good condition and from
<br />time to time, forthwith, replace and repair all such parts of the collateral as may be broken, worn out, or damaged without allowing any lien
<br />to be created upon the COLLATERAL on account of such replacement or repairs, and that the SECURED PARTY may examine and inspect the
<br />COLLATERAL at any time, wherever located.
<br />9. That the DEBTOR will not use the COLLATERAL in violation of any applicable statutes, regulations or ordinances.
<br />10. The DEBTOR will keep the COLLATERAL at all times insured against risks of loss or damage by fire (including so- called extended
<br />coverage), theft and such other casualties as the SECURED PARTY may reasonably require, including collision in the case of any motor vehicle,
<br />all in such amounts, under such forms of policies, upon such terms, for such periods, and written by such companies or underwriters as
<br />the SECURED PARTY may approve, losses in all cases to be payable to the SECURED PARTY and the DEBTOR as their interest may appear. All
<br />ATTACHMENT 2
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