PROJC01739 ‎(3)‎

• Contract/PO #: C153768
• Contractor Name: Lower Arkansas Water Management Association
• Contract Type: Loan
• Water District: 67
• County: Bent
• County: Prowers
• Bill Number: SB 96-124
• Loan Projects - Doc Type: Contract Documents

SECURITY AGREEMENT
DATE: APRIL 1,2004

DEBTOR: THE LOWER ARKANSAS WATER MANAGEMENT ASSOCIATION

SECURED PARTY: COLORADO WATER CONSERVATION BOARD

PROMISSORY NOTE: $1,875,583.50, DATED APRIL 1,2004

TERMS OF REPAYMENT: 3% PER ANNUM FOR 40 YEARS

LOAN CONTRACT: C153768, dated May 28, 1997, and amended May 17, 1999;
January 14,2000; and March 10,2001; and April 1 ,2004

PLEDGED PROPERTY: All revenues derived from membership assessments to repay the
indebtedness on the amount loaned to DEBTOR by the SECURED
PARTY and all rights of DEBTOR to receive assessment revenues
from its members in accordance with the Pledge of Property
Provisions (Paragraph A.12) of the Loan Contract and the
Resolution adopted April 10, 1997 by the Debtor's Board of
Directors.

To secure payment of the loan evidenced by the PROMISSORY NOTE payable in accordance
with the TERMS OF REPAYMENT, or until all principal, interest, and late charges, if any, are paid
in full, the DEBTOR grants to SECURED PARTY a security interest in the above described PLEDGED
PROPERTY.
DEBTOR EXPRESSLY WARRANTSAND COVENANTS:
1. That except for the security interest granted hereby and any other security interests granted
by DEBTOR to SECURED PARTY, DEBTOR is the owner of the PLEDGED PROPERTY free from
any adverse lien, security interest or encumbrances; and that DEBTOR will defend the
PLEDGED PROPERTY against all claims and demands of all persons at any time claiming the
same or any interest therein.
2. That the execution and delivery of this agreement by DEBTOR will not violate any. law or
agreement governing DEBTOR or to which DEBTOR is a party.
3. To not permit or allow any adverse lien, security interest or encumbrance whatsoever upon
the PLEDGED PROPERTY and noUo permit the same to be attached or replevined.
4. That by its acceptance of the loan money pursuant to the terms of the CONTRACT and by its
representations herein, DEBTOR shall be estopped from asserting for any reason that it is
not authorized to grant a security interest in the PLEDGED PROPERTY pursuant to the terms of
this agreement.
5. To pay all taxes and assessments of every nature which may be levied or assessed against
the PLEDGED PROPERTY.
6. That the DEBTOR'S articles of incorporation and by-laws do not prohibit any term or condition
of this agreement.
UNTIL DEFAULT DEBTOR may have possession of the PLEDGED PROPERTY, provided
that DEBTOR keeps the PLEDGED PROPERTY in an account separate from other revenues of
DEBTOR and does not use the PLEDGED PROPERTY for any purpose not permitted by the
CONTRACT. Upon default, SECURED PARTY shall have the immediate right to the possession of

Appendix B to Loan Contract C153768 Amendment No.4