C150218 Contract

• Contract/PO #: C150218
• Contractor Name: Hope Ditch Company
• Contract Type: Loan
• Water District: 1
• County: Adams
• Loan Projects - Doc Type: Contract Documents

SECURITY AGREEMENT

(PLEDGE OF REVENUES)

DATE: MAY 4,2006

DEBTOR: HOPE DITCH eOMPANY

SECURED PARTY: COLORADO WATER CONSERVATION BOARD

PROMISSORY NOTE: $154,530, DATED FEBRUARY 3,2006

TERMS OF REPAYMENT: 3.75% PER ANNUM FOR 30 YEARS

LOAN CONTRACT: C150218, DATED MAY 4, 2006

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 April 24, 2006.

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.
DEBTOR SHALL BE IN DEFAULT under this agreement upon any of the
following events or conditions:
a. default in the payment or performance of any obligation contained herein or in the

Appendix 4 to Loan Contract C150218
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