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. � SECURITY AGREEMENT (PLEDGE OF REVENUES� DATE: JUNE 18, 2007 DEBTOR: BULL CREEK RESERVOIR CANAL 8c POWER COMPANY SECURED PARTY: COLORADO WATER CONSERVATION BOARD PROMISSORY NOTE: $1,212,000, DATED.IUNE 18, 2007 TERMS OF REPAYMENT: Z.SO°/6 PER ANNUM FOR 3O YEARS LoEw CoNTw4cT: C150240, DATED .1UNE 18, 2007 Co��rERa�: All revenues derived from assessments on stock levied for the purpose of repayment of the subject loan and all of Debtor's right to receive said assessment revenues to repay the loan as described in Pledge of Property provisions of the Loani CoNrt�cT and Debtor's Resolutions adopted March 10, 2007. To secure payment of the loan evidenced by the PROMissoRY NoTE payable in accordance Wl�h th@ TERMS OF REPAYMENT, or until all principal, interest, and late charges, if any, are paid in full, the DEeTOR 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, DESroR is the owner of the Cou.�►TEw� free from any adverse lien, security interest or encumbrances; and that DESTOR will defend the Co�wTEw�� 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 DEBTOrt will not violate any law or agreement goveming DEBTOR or to which DESTOR is a party. 3. To not permit or allow any adverse lien, security interest or encumbrance whatsoever upon the Co�wrEw4� 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 Conrrw�cT and by its rep�e.sentations herein, DESTOR shall be estopped from asserting for any reason that it is not authorized to grant a security interest in the CouATEw�►� pursuant to the terms of this agreement. 5. To pay all taxes and assessments of every nature which may be levied or assessed against th@ COLLATERAL. 6. That the DESroR'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 Co�u�rEw4� in an account separate from other revenues of DEeTOR and does not use the Co��TE�� for any purpose not permitted by the CoNTw�cT. Upon default, SECURE� PAR�nr shall have the immediate right to the possession of the Co�wrEtza�. Appendix 4 to Loan Contract C150240 Page 1 of 2