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<br />-~_..:~....<-,..--, <br /> <br />SECURITY AGREEMENT <br /> <br />(PLEDGE OF REVENUES) <br /> <br />DATE: NOVEMBER 1, 2002 <br /> <br />DEBTOR: THE LAKE HENRY RESERVOIR eOMPANY <br /> <br />SECURED PARTY: COLORADO WATER CONSERVATION BOARD <br />1313 SHERMAN STREET, ROOM 721 <br />DENVER, eo 80203 <br /> <br />PROMISSORY NOTE: $490,000, DATED NOVEMBER 1, 2002 <br /> <br />TERMS: REPAYMENT PERIOD OF 30 YEARS, INTEREST AT THE RATE 01= 4.25% <br />PER ANNUM <br /> <br />LOAN eONTRACT: e150098, DATED NOVEMBER 1, 2002 <br /> <br />PLEDGED PROPERTY: All revenues derived from assessments on stock and all of <br />Debtor's right to receive said assessment revenues to repay the <br />loan as described in Pledge of Property provisions of ,the LOAN <br />CONTRACT. <br /> <br />To secure payment of the loan evidenced by the PROMISSORY NOTE payable in accordance <br />with the TERMS, or until all principal, interest, and late charges, if any, are paid in full, the <br />DEBTOR grants to SECURED PARTY a security interest in the above described PLEDGED <br />PROPERTY. <br />DEBTOR EXPRESSLY WARRANTS AND eOVENANTS: <br /> <br />1. That except for the security interest granted hereby and any other security interests <br />described in Section 5 of the Loan Contract Project Summary, DEBTOR is the owner of the <br />PLEDGED PROPERTY free from any adverse lien, security interest or encumbrances; and that <br />DEBTOR. will defend the PLEDGED PROPERTY against all claims and demands of all persons at <br />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 <br />agreement 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 <br />the PLEDGED PROPERTY 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 eONTRACT and by its <br />representations herein, DEBTOR shall be estopped from asserting for any reason that it is <br />not authorized to grant a security interest in the PLEDGED PROPERTY pursuant to the terms of <br />this agreement. <br />5. To pay all taxes and ass~ssments of every nature which may be levied or assessed against <br />the PLEDGED PROPERTY. <br />6. That the DEBTOR'S articles of incorporation and by-laws do not prohibit any term or condition <br />of this agreement. <br />UNTIL DEFAULT DEBTOR may have possession of the PLEDGED PROPERTY, provided <br />that DEBTOR keeps the PLEDGED PROPERTY in an account separate from other revenues of <br />DEBTOR and does not use the PLEDGED PROPERTY for any purpose not permitted by the <br />CONTRACT. Upon default, SECURED PARTY shall have the immediate right to the possession of <br />the PLEDGED PROPERTY. <br /> <br />Appendix 4 to Loan Contract C150098 <br />