PROJC02506

• Contract/PO #: C150193
• Contractor Name: Dolores Water Conservancy District
• Contract Type: Loan
• Water District: 34
• County: Montezuma
• Loan Projects - Doc Type: Contract Documents

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ASSIGNMENT OF INVESTMENT FUND AND
INTEREST
In consideration of and as security for a loan ("Loan") from the Colorado Water
Conservation Board ("Secured Party") to The Dolores Water Conservancy District, acting
by and through the Dolores Water Conservancy District Water Activity Enterprise
("Debtor") pursuant to Contract Encumbrance Number C150193 dated September 1,
2005 and amended December 28, 2006 ("Loan Contract"), Debtor hereby assigns,
transfers and grants to Secured Party a security interest in the fund established by the
short term Investment Agreement between Debtor and MBIA Inc. in the rinciple amount
of $2,283,232.62, dated August 4, 2006, and the intere arned re hereinafter
referred to as the Fund. Said Investment A ent is inc porated h rein y reference.
Debtor warrants that the nd s bee stab hed as special to be used
solely for repayment of the L n Secure arty nder th an Contract.
The Fund secures the yment and performance of all of Debtor's present and
future, direct or indirect, absolute and contingent, express and implied, indebtedness,
liabilities, obligations and covenants (cumulatively "Obligations") under the Loan Contract
described above and any amendments thereto. This Assignment is made solely to
secure pertormance of the O bligations a nd i s m ade s ubject t o t he f ollowing t erms,
covenants and conditions:
1. This Assignment is effective upon signing and will remain in full force and effect until
Secured P arty s pecifically t erminates t he security interest in the Fund in writing.
Secured Party shall release this Assignment when the Loan is paid in full.
2. Neither the Debtor nor anyone else (except Secured Party) has any right to withdraw
any funds from the Fund until the Secured Party releases this Assignment in writing,
except that, at Debtor's request, MBIA Inc. shall allow transfers of funds from the Fund
to the Secured Party.
3. Debtor shall be in default under the Loan Contract for purposes of this Assignment
upon the occurrence of any of the following events or conditions: (a) failure or
omission to make any payment under the Loan Contract when due; (b) default in the
payment or performance of any obligation, covenant, agreement or liability contained
or referred to in the Loan Contract; (c) the making of any levy, seizure, or attachment
on the Fund; (d) the Debtor becoming insolvent or unable to pay debts as they
mature. Secured Party shall give the Debtor written notice of any alleged default and
an opportunity to cure within thirty (30) days of receipt of such notice before Debtor
shall be considered in default for purposes of this Assignment.
4. Upon or at any time after a default under the Loan Contract as described in Paragraph
3 above, Secured Party shall be entitled to notify MBIA Inc. to pay Secured Party the
funds contained in the Fund. Secured Party shall apply such moneys first to costs
associated with collection, including, but not limited to, reasonabfe attorney's fees,
next to late charges, if any, then to outstanding interest, and then to the principal sum
of the Loan.
Appendix B to Loan Contract C150193 Amendment No. 1