C150150 Contract

• Contract/PO #: C150150
• Contractor Name: Lower Arkansas Water Management Association
• Contract Type: Loan
• Water District: 67
• County: Bent
• Loan Projects - Doc Type: Contract Documents

SECURITY AGREEMENT

(PLEDGE OF REVENUES)

DATE: JANUARY1,2004

DEBTOR: LOWER ARKANSAS WATER MANAGEMENT ASSOCIATION

SECURED PARTY: COLORADO WATER CONSERVATION BOARD
1313 SHERMAN STREET, ROOM 721
DENVER, CO 80203

PROMISSORY NOTE: $2,272,500, DATED JANUARY 1, 2004

TERMS OF REPAYMENT: 2.5% PER ANNUM FOR 30 YEARS

LOAN CONTRACT: C150150, DATED JANUARY 1, 2004

COLLATERAL: All revenues derived from membership dues and
assessments on stock and all of Debtor's right to receive said
membership dues and assessment revenues pledged 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 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
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 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 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,

Appendix 4 to Loan Contract C150150