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SECURITY AGREEMENT <br /> (PLEDGE OF REVENUES) <br /> DATE: JANUARY 25, 2014 <br /> DEBTOR: WADLEY FARMS, FILING NO. 3 HOMEOWNER'S ASSOCIATION <br /> SECURED PARTY: COLORADO WATER CONSERVATION BOARD <br /> PROMISSORY NOTE: $727,200 <br /> TERMS OF REPAYMENT: 3.00% PER ANNUM FOR 30 YEARS <br /> LOAN CONTRACT: #0150379 <br /> COLLATERAL: All revenues derived from assessment revenues and all of DEBTOR'S right to <br /> receive said assessment revenues to repay the loan as described in PLEDGED <br /> PROPERTY provisions of the LOAN CONTRACT and DEBTOR'S Resolutions adopted <br /> January 25, 2014. This is in compliance with the CWCB Financial Policy#5 <br /> (COLLATERAL). <br /> To secure payment of the loan evidenced by the PROMISSORY NOTE payable in accordance with the TERMS OF <br /> REPAYMENT, or until all principal, interest, and late charges, if any, are paid in full, the DEBTOR grants to SECURED <br /> PARTY a security interest in the above described COLLATERAL. <br /> DEBTOR EXPRESSLY WARRANTS AND COVENANTS: <br /> 1. That except for the security interest granted hereby and any other security interests described in Section <br /> 5 of the LOAN CONTRACT PROJECT SUMMARY, DEBTOR is the owner of the COLLATERAL free from any <br /> adverse lien, security interest or encumbrances; and that DEBTOR will defend the COLLATERAL against all <br /> claims and demands of all persons at any time claiming the same or any interest therein. <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 /> 3. To not permit or allow any adverse lien, security interest or encumbrance whatsoever upon the <br /> COLLATERAL and not to permit the same to be attached or replevined. <br /> 4. That by its acceptance of the loan money pursuant to the terms of the CONTRACT and by its <br /> representations herein, DEBTOR shall be estopped from asserting for any reason that it is not <br /> authorized to grant a security interest in the COLLATERAL pursuant to the terms of this agreement. <br /> 5. To pay all taxes and assessments of every nature which may be levied or assessed against the <br /> COLLATERAL. <br /> 6. That the DEBTOR'S articles of incorporation and bylaws do not prohibit any term or condition of this <br /> agreement. <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 /> purpose not permitted by the CONTRACT. Upon default, SECURED PARTY shall have the immediate right to the <br /> possession of the COLLATERAL. <br /> DEBTOR SHALL BE IN DEFAULT under this agreement upon any of the following events or conditions: <br /> a. default in the payment or performance of any obligation contained herein or in the PROMISSORY NOTE or <br /> Appendix 4 to Loan Contract C150338 <br /> Page 1 of 2 <br />