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e e SECURITY AGREEMENT DEBTOR: The Lower South Platte Water Conservancy District, acting by and through the Lower South Platte Recharge Project Water Activity Enterprise 100 Broadway Plaza, #12 Sterling, CO 80751 FEDERAL TAX NUMBER: 84-0562269 COUNTY: LOGAN (CODE: 13) SECURED PARTY: State of Colorado - Colorado Water Conservation Board 1313 Sherman Street, Room 721 Denver, CO 80203 COLLATERAL: Contract Rights (Code: 030) DEBTOR, for consideration, hereby grants to SECURED PARTY a security interest in the following propertYcm-d-any and-a1~additions,-accessions -and- so bstitutiunsih'ereto-or therefor; hereinafter called the COLLATERAL: All revenues derived from (1) the sale by the DEBTOR of replacement water from the Project to the Groundwater Appropriators of the South Platte River and/or to any other purchasers, as described in the Collateral provisions of the Project Summary in Contract No. C150067, and (2) Water Activities, said revenues to repay the indebtedness on the amount loaned to Debtor by secured party, as described in Pledge of Property provisions in Contract No. C150067 (CONTRACT). To secure payment of the indebtedness evidenced by the Promissory Note between the, above named parties herewith, payable to the SECURED PARTY, the loan amount of $100,000 at an interest rate of 3% per annum for a period of 10 years in accordance with said Promissory Note or until all principal and interest are paid in full. DEBTOR EXPRESSLY WARRANTS AND COVENANTS: 1. That except for the security interest granted hereby, DEBTOR is, or to the extent that this agreement states that the COLLATERAL is to be acquired after the date hereof, will be, 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 anytime 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. That, if DEBTOR is a corporation, its certificate and articles of incorporation and by-laws do not prohibit any term or condition of this agreement. 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. Appendix 4 to Loan Contract C150067