C150171 Contract

• Contract/PO #: C150171
• Contractor Name: Terrace Irrigation Company, The
• Contract Type: Loan
• Water District: 0
• County: Conejos
• Loan Projects - Doc Type: Contract Documents

SECURITY AGREEMENT

(PLEDGE OF REVENUES)

DATE: APRIL 1,2004

DEBTOR: The Terrace Irrigation Company

SECURED PARTY: COLORADO WATER CONSERVATION BOARD

PROMISSORY NOTE: $245,430, dated April 1 ,2004

TERMS OF REPAYMENT: 2.50% PER ANNUM FOR 30 YEARS

LOAN CONTRACT: C 150 171 , DATED APRIL 1 , 2004

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 and Debtor's Resolutions adopted March 25,
2004 and May 12, 2004.

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,
SECURED PARTY shall have the immediate right to the possession of the COLLATERAL.

Appendix 4 to Loan Contract C150171