PROJ02132

• Contract/PO #: C150167
• Contractor Name: FL Gill H20 LLC
• Contract Type: Loan
• Water District: 0
• Loan Projects - Doc Type: Contract Documents

SECURITY AGREEMENT

(PLEDGE OF REVENUES)

DATE: SEPTEMBER 20, 2004

DEBTOR: FL Gill H20 LLC

SECURED PARTY: COLORADO WATER CONSERVATION BOARD

PROMISSORY NOTE: $115,898, DATED SEPTEMBER 20, 2004

TERMS OF REPAYMENT: 2.50% PER ANNUM FOR 30 YEARS

LOAN CONTRACT: C150167, DATED SEPTEMBER 20, 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 X,& A SEPARATE
SECURITY AGREEMENT FOR EACH STOCK CERTIFICATE
WITH A DIFFERENT OWNER

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:

Appendix 4 to Loan Contract C150167