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<br />SECURITY AGREEMENT <br /> <br />DEBTOR: <br /> <br />Town of Georgetown Water and Sewer Activity Enterprise <br />P.O. Box 426 <br />Georgetown, Colorado 80444 <br /> <br />84-6000671 <br /> <br />'State of Colorado - Colorado Water Conservation Board <br />1313 Sherman Street, Room 721 <br />Denver, CO 80203 <br /> <br />CONTRACT RIGHTS (Code: 030) <br /> <br />Clear Creek (Code: 51) <br /> <br />FEDERAL ID No: <br />SECURED PARTY: <br /> <br />COLLATERAL: <br />COUNTY: <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 the <br />Pledge of Revenues Provisions contained in Loan Contract No. C153738 (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 as follows: the loan amount of <br />$190,000 with interest at a rate of 5.25% per annum, payable in 30 annual installments or until all principal, <br />interest, and late charges, if any, are paid in full, in accordance with said Promissory Note. <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 this agreement states <br />that the COLLATERAL is to be acquired after the date hereof, will be, the owner of the COLLATERAL free from <br />any adverse lien, security interest or encumbrances; and that DEBTOR will defend the COLLATERAL against <br />all claims and demands of all persons at anytime 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 />goveming 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. <br /> <br />4. 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 as'serting for any reason that ~ is not authorized to grant a security <br />interest in the COLLATERAL pursuant to the terms of this agreement. <br /> <br />5. To pay all taxes and assessments of every nature which may be levied or assessed against the <br />COLLATERAL. <br /> <br />6. To not permit or allow any adverse lien, security interest or encumbrance whatsoever upon the <br />COLLATERAL and not to perm~ the same to be attached or replevined. <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 />purpose not permitted by the CONTRACT. Upon default, SECURED PARTY shall have the immediate right to the <br />possession of the COLLATERAL. <br /> <br />DEBTOR SHALL BE IN DEFAULT under this agreement upon the happening of any of the following <br />events or conditions: <br /> <br />Appendix 3 to Loan Contract No. C153738 <br />