C150118 Paid in Full Contract

• Contract/PO #: C150118
• Contractor Name: The Kern Resevoir and Ditch company
• Contract Type: Loan
• Loan Projects - Doc Type: Contract Documents

SECURITY AGREEMENT
(PLEDGE OF REVENUES)
DATE: JUNE 1, 2003
DEBTOR: KERN RESERVOIR AND DITCH COMPANY
SECURED PARTY: COLORADO WATER CONSERVATION BOARD
1313 SHERMAN STREET, ROOM 721
DENVER, CO 80203
PROMISSORY NOTE: $3,620,000, DATED JUNE 1, 2003
REPAYMENT TERMS: 5.10% INTEREST PER ANNUM FOR 30 YEARS
LOAN CONTRACT: C150118, DATED JUNE 1, 2003
COLLATERAL: All revenues derived from assessments on stock and all of
Debtor's right to receive said assessment revenues to repay
the loan as described in Pledge of Property provisions of the
LOAN CONTRACT.
To secure payment of the loan evidenced by the PROMISSORY NOTE payable in
accordance with the REPAYMENT TERMS, 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 COLLATERAL.
DEBTOR EXPRESSLY WARRANTS AND COVENANTS:
1. That except for the security interest granted hereby and any other security interests
described in Section 5 of the Loan Contract Project Summary, DEBTOR is the owner of
the COLLATERAL free from any adverse lien, security interest or encumbrances; and that
DEBTOR will defend the COLLATERAL 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 DEB,OR 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 encumifrance whatsoever
upon the COLLATERAL and not to 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 COLLATERAL 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 COLLATERAL.
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 COLLATERAL, provided that
DEBTOR keeps the COLLATERAL in an account separate from other revenues of DEBTOR and
does not use the COLLATERAL for any purpose not permitted by the CONTRACT. Upon
default, SECURED PARTY shall have the immediate right to the possession of the
Appendix 4 to Loan Contract C150118