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<br />SECURITY AGREEMENT <br /> <br />(PLEDGE OF REVENUES) <br /> <br />DATE: OCTOBER 1, 2003 <br /> <br />DEBTOR: GROUNDWATER MANAGEMENT SUBDISTRICT OF THE CENTRAL <br />COLORADO WATER CONSERVANCY DISTRICT <br /> <br />SECURED PARTY: COLORADOW ATER CONSERVATION BOARD <br />1313 SHERMAN STREET, ROOM 721 <br />DENVER, CO 80203 <br /> <br />PROMISSORY NOTE: $15,000,000, DATED OCTOBER 1,2003 <br /> <br />REPAYMENT TERMS: 2.75% PER ANNUM FOR 30 YEARS <br /> <br />LOAN CONTRACT: C150117 DATED OCTOBER 1,2003 <br /> <br />COLLATERAL: All revenues pledged to repay the loan as described in <br />Pledge of Revenues provisions of the LOAN CONTRACT and <br />in the Resolution adopted by the DEBTOR on July 15, 2003. <br /> <br />To secure payment of the loan evidenced by the PROMISSORY NOTE payable in <br />accordance with the REPAYMENT TERMS, or until all principal, interest, and late charges, if <br />any, are paid in full, the DEBToRgrants to SECURED PARTY a security interest in the above <br />described COLLATERAL. <br /> <br />DEBTOR EXPRESSLY WARRANTS AND COVENANTS: <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 <br />the COLLATERAL free from any adverse lien, security interest or encumbrances; and <br />that DEBTOR will defend the COLLATERAL against all claims and demands of all persons <br />at any time 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 <br />agreement governing DEBTOR or to which DEBTOR is a party. <br /> <br />3. To not permit or allow any adverse lien, security interest or encumbrance whatsoever <br />upon the COLLATERAL and not to permit the same to be attached or replevined. <br /> <br />4. . That by its acceptance of the loan money pursuant to the terms of the CONTRACT and <br />by its representations herein, DEBTOR shall be estopped from asserting for any reason <br />that it is not authorized to grant a security interest in the COLLATERAL pursuant to the <br />terms of this agreement. <br /> <br />UNTIL DEFAULT DEBTOR may have possession of the COLLATERAL, provided that <br />DEBTOR keeps the COLLATERAL in an account separate from other revenues of DEBTOR <br />and does not use the COLLATERAL for any purpose not permitted by the CONTRACT. Upon <br />default, SECURED PARTY shall have the immediate right to the possession of the <br />COLLATERAL. . <br /> <br />Appendix 4 to Loan Contract C150117 <br />