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SECURITY AGREEMENT <br />(PLEDGE OF REVENUES) <br />DATE: April 11, 2012 <br />DEBTOR: TRI- COUNTY WATER CONSERVANCY DISTRICT, ACTING BY AND <br />THROUGH ITS WATER ACTIVITY ENTERPRISE <br />SECURED PARTY: COLORADO WATER CONSERVATION BOARD <br />1313 SHERMAN STREET, ROOM 721 <br />DENVER, CO 80203 <br />PROMISSORY NOTE: $9,090,000, DATED April 11, 2012 <br />TERMS OF REPAYMENT: 2.0% PER ANNUM FOR 30 YEARS <br />LOAN CONTRACT: C150324, DATED April 11, 2012 <br />COLLATERAL: All Enterprise revenues pledged to repay the loan as <br />described in Pledge of Revenues provisions of the LOAN <br />CONTRACT AND DEBTORS RESOLUTION DATED APRIL 11, 2012. <br />To secure payment of the loan evidenced by the PROMISSORY NOTE payable in <br />accordance with the TERMS OF REPAYMENT, or until all principal, interest, and late <br />charges, if any, are paid in full, the DEBTOR grants to SECURED PARTY a security interest in <br />the above described COLLATERAL. <br />DEBTOR EXPRESSLY WARRANTS AND COVENANTS: <br />That except for the security interest granted hereby and any other security interests <br />described in Section 5 of the Loan Contract Project Summary, DEBTOR is the owner of <br />the COLLATERAL free from any adverse lien, security interest or encumbrances; and <br />that DEBTOR will defend the COLLATERAL against all claims and demands of all persons <br />at any time claiming the same or any interest therein. <br />2. That the execution and delivery of this agreement by DEBTOR will not violate any law or <br />agreement governing DEBTOR or to which DEBTOR is a party. <br />3. To not permit or allow any adverse lien, security interest or encumbrance whatsoever <br />upon the COLLATERAL and not to permit the same to be attached or replevined. <br />4. That by its acceptance of the loan money pursuant to the terms of the CONTRACT and <br />by its representations herein, DEBTOR shall be estopped from asserting for any reason <br />that it is not authorized to grant a security interest in the COLLATERAL pursuant to the <br />terms of this agreement. <br />UNTIL DEFAULT DEBTOR may have possession of the COLLATERAL, provided that <br />DEBTOR keeps the COLLATERAL in an account separate from other revenues of DEBTOR <br />and does not use the COLLATERAL for any purpose not permitted by the CONTRACT. Upon <br />default, SECURED PARTY shall have the immediate right to the possession of the <br />COLLATERAL. <br />Appendix 4 to Loan Contract C150324 <br />Page 1 of 3 <br />