|
<br />SECURITY AGREEMENT
<br />
<br />DEBTOR:
<br />
<br />City of Fort Morgan, Colorado Water Works and Distribution Enterprise
<br />P.O. Box 100,710 E. Railroad'
<br />Fort Morgan, CO 80701
<br />
<br />84-6000588
<br />
<br />FEDERAL TAX NUMBER:
<br />
<br />COUNTY: MORGAN (CODE: 15)
<br />
<br />SECURED PARTY: State Of Colorado, Colorado Water Conservation Board
<br />1313 Sherman Street, Room 721
<br />Denver, CO 80203
<br />
<br />DEBTOR, for consideration, hereby grants to SECURED PARTY a security interest in the following property and any and
<br />all additions, accessions and substitutions thereto or therefor, hereinafter called the COLLATERAL:
<br />
<br />A. Water system revenues derived from water rates, charges and fees levied to repay the principal and interest on
<br />the amount loaned to DEBTOR by SECURED PARTY, as described in pledge of revenues provisions in Loan
<br />Contract No. C150004 ("Contract");
<br />
<br />B. DEBTOR'S contract rights under and all revenues derived from any sale or lease of the DEBTOR'S interest in: (1)
<br />the Allotment Contract for Capacity in the Southern Water Supply Project Pipeline between the City of Fort
<br />Morgan, Colorado, acting by and through the City of Fort Morgan, Colorado Water Works and Distribution
<br />Enterprise and the Northern Colorado Water Conservancy District, acting by and through the Southern Water
<br />Supply Project Water Activity Enterprise, dated January 14, 1994; (2) the Allotment Contract for Capacity in the
<br />Fort Lupton/Hudson Pipeline between the City of Fort Morgan, Colorado, acting by and through the City of Fort
<br />Morgan, Colorado Water Works and Distribution Enterprise and the Northern Colorado Water Conservancy
<br />District, acting by and through the Southern Water Supply Project Water Activity Enterprise, dated August 4,
<br />1995; and (3) the Allotment Contract for Capacity in the Morgan Pipeline between the City of Fort Morgan,
<br />Colorado, acting by and through the City of Fort Morgan, Colorado Water Works and Distribution Enterprise and
<br />the Northern Colorado Water Conservancy District, acting by and through the Southern Water Supply Project
<br />Water Activity Enterprise, dated July 14, 1998.
<br />
<br />To secure payment of the obligations evidenced by a Promissory Note, which is a part of the Contract between the
<br />above named parties herewith, payable to the SECURED PARTY as follows: $8,000,000 payable in thirty annual
<br />installments in accordance with the Promissory Note or until all principal, interest, and late charges, if any, are paid
<br />in full.
<br />
<br />DEBTOR EXPRESSLY WARRANTS AND COVENANTS:
<br />
<br />1. That except for the security interest granted hereby, DEBTOR is, or to the extent that ttiTs'agreement states that
<br />the COLLATERAL is to be acquired after the date hereof, will be, the owner. of ,the COLLATERAL free from any
<br />adverse lien, security interest or encumbrances, except as provided in the Contract,. and .that DEBTOR will defend
<br />the COLLATERAL against all claims and demands of all persons at anytime claiming iHe;'same or .any interest
<br />therein by, through or under DEBTOR. . . . .. . .
<br />
<br />2. That the execution and delivery of this agreement by DEBTOR will not violate ,any rilw 'enlgreement governing
<br />DEBTOR or to which DEBTOR is a party. .
<br />
<br />3. That, by its acceptance of the loan money pursuant to the terms of the CONTRACT and by its representations
<br />herein, DEBTOR shall be estopped from asserting for any reason that it is not authorized to grant a security
<br />interest in the COLLATERAL pursuant to the terms of this agreement.
<br />
<br />4. To pay all taxes and assessments of every nature which may be levied or assessed against the COLLATERAL.
<br />
<br />5. To not permit or allow any adverse lien, security interest or encumbrance whatsoever upon the COLLATERAL and
<br />not to permit the same to be attached or replevined.
<br />
<br />6. That the DEBTOR will not use the COLLATERAL in violation of any applicable statutes, regulations or ordinances,
<br />articles of incorporation or by-laws.
<br />
<br />DEBTOR SHALL BE IN DEFAULT under this agreement upon the happening of any of the following events
<br />or conditions:
<br />
<br />Appendix C to Loan Contract C150004
<br />
|