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SECURITY AGREEMENT <br />(PLEDGE OF REVENUES) <br />DATE: May 22, 2014 <br />DEBTOR: Sylvan Dale Ranch, LLLP, a Limited Liability Limited Partnership <br />SECURED PARTY: Colorado Water Conservation Board <br />PROMISSORY NOTE: $105,171 <br />TERMS OF REPAYMENT: 30 years - no payments and zero interest for the first three years followed <br />by 27 years of amortized payments at the interest rate of 1.75% per <br />annum <br />LOAN CONTRACT: C150392 <br />COLLATERAL: twenty (20) acre-foot units of Colorado -Big Thompson Project Water <br />contractual rights #2123, administered through the Northern Water <br />Conservancy District, as described in Section 6, APPEN Ix 1 of <br />the LOAN CONTRACT and the BORROWER'S RESOLUTION, dated3/�G/� <br />To secure payment of the loan evidenced by the PROMISSORY NOTE payable in accordance with the TERMS <br />OF REPAYMENT, or until all principal, interests, and late charges, if any, are paid in full, the DEBTOR grants to <br />SECURED PARTY a security interest in the above described COLLATERAL. <br />DEBTOR EXPRESSLY WARRANTS AND COVENANTS: <br />1. That except for the security interest granted hereby and any other security interests described in Section <br />5 of the LOAN CONTRACT PROJECT SUMMARY, DEBTOR is the owner of the COLLATERAL free from any <br />adverse lien, security interest or encumbrances; and that DEBTOR will defend the COLLATERAL against all <br />claims and demands of all persons 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 agreement <br />governing DEBTOR or to which DEBTOR is a party. <br />3. To not permit or allow any adverse lien, security interest or encumbrance whatsoever upon the <br />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 by its <br />representations herein, DEBTOR shall be estopped from asserting for any reason that it is not authorized <br />to grant a security interest in the COLLATERAL pursuant to the terms of this agreement. <br />5. To pay all taxes and assessments of every nature that may be levied or assessed against the <br />COLLATERAL. <br />6. That the DEBTOR's articles of incorporation and by-laws do not prohibit any term or condition of this <br />agreement. <br />UNTIL DEFAULT DEBTOR may have possession of the COLLATERAL, provided that DEBTOR keeps the <br />COLLATERAL in an account separate from other revenues of DEBTOR and does not use the COLLATERAL for <br />any purpose not permitted by the CONTRACT. Upon default, SECURED PARTY shall have the immediate right to <br />the possession of the COLLATERAL. <br />DEBTOR SHALL BE IN DEFAULT under this agreement upon any of the following events or <br />conditions: <br />a. default in the payment or performance of any obligation contained herein or in the PROMISSORY <br />NOTE or LOAN CONTRACT; <br />Appendix 4 to Loan Contract C150392 <br />Page 1 of 2 <br />