C153757 Contract

• Contract/PO #: C153757
• Contractor Name: Decker Lateral Company
• Contract Type: Loan
• Water District: 3
• County: Weld
• Bill Number: SPL
• Loan Projects - Doc Type: Contract Documents

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SECURITY AGREEMENT

DEBTOR: The Decker Lateral Company
30896 WCR 57
Gill, CO 80624

FEDERAL TAX NUMBER: 84-0441735

COUNTY: WELD (CODE: 03)

SECURED PARTY: State of Colorado, Colorado Water Conservation Board
1313 Sherman Street, Room 721
Denver, CO 80203

COLLATERAL: Contract Rights (Code: 030)

DEBTOR, for consideration, hereby grants to SECURED PARTY a security interest in the following property
and any and all additions, accessions and substitutions thereto or therefor, hereinafter called the
COLLATERAL: All revenues derived from assessments levied to repay the indebtedness on the amount
loaned to DEBTOR by SECURED PARTY, and all rights of DEBTOR to receive said assessment revenues
from its stockholders, as described in pledge of property provisions in Loan Contract C153757.

To secure payment of the indebtedness evidenced by certain Promissory Note between the above
named parties herewith, in the amount of $100,000.00 @t an interest rate of 4.25% per annum for a tenm
of 30 years, payable by DEBTOR to the SECURED PARTY until all principal and interest are paid in full in
accordance with said Promissory Note.

DEBTOR EXPRESSLY WARRANTS AND COVENANfS:

1. That except for the security interest grant hereby, DEBTOR is, or to the extent that this agreement
states that the COLLATERAL is to be acquired after the date hereof, will be, the owner of the
COLLATERAL free from any adverse lien, security intsrest or encumbrances.

2. That the execution and delivery of this agreement Dy DEBTOR will not violate any law or agreement
governing DEBTOR or to which DEBTOR is a party.

3. That, if DEBTOR is a corporation, its certificate and articles of incorporation and by-laws do not
prohibit any tenm or condition of this agreernent.,

4. That by its acceptance of the loan money pursuant to the tenms of the CONTRACT and by its
representations herein, DEBTOR shall be estopped frorn asserting for any reason that it is not
authorized to grant a security interest in the COLLATE'RAL pursuant to the tenms of this ag!eef1ienl:."' "':,
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5. To pay all taxes and assessments of every nature which may be levied or assessed'.against the, .
COLLATERAL.

6. To not penmit or allow any adverse lien, security interest or encumbrance whatsc;>ever UPOI1, the _
COLLATERAL and not to penmit the same to be attached or replevined. .' '. '. . c '.
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7. That the DEBTOR will not use the COLLATERAL in violation of any applicable statutes; regulations,
ordinances, articles of incorporation or by-laws. . . " . ,l
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UNLESS IT DEFAULTS DEBTOR may have possession of the COLLATERAL, provided that DEBTOR
keeps all revenues derived from stockholdership assessments in the arnount of the annual loan
payments due under the contract, as amended, in an account separate frorn other revenues of DEBTOR

Appendix 5 to Loan Contract C153757