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SECURITY AGREEMENT <br /> DATE: AUGUST 1,2017 <br /> BORROWER: SOUTHEASTERN COLORADO WATER CONSERVANCY DISTRICT, <br /> AcnNG BYAND THROUGH ITS WATER AC rwm ENTERPRISE <br /> SECURED PARTY: COLORADO WATER CONSERVATION BOARD <br /> PROMISSORY NOTE: $17,392,200.00 <br /> TERMS OF REPAYMENT: 2.00%INTEREST FOR THIRTY(3o)YEARS <br /> LOAN CONTRACT NUMBER: CT2o18-833 <br /> PLEDGED POWER REVENUES: All PLEDGED POWER REVENUES, as defined in the LOAN RESOLUTION attached as <br /> APPENDIX 4 and the SECURITY AGREEMENT,attached as APPENDIX 5 to the LOAN CONTRACT,and all of DEBTOR'S right to receive <br /> said revenues to repay the loan as described in PLEDGED POWER REVENUES provisions of the LOAN CONTRACT. <br /> To secure payment of the loan evidenced by the PROMISSORY NOTE payable in accordance with the TERMS OF REPAYMENT,or <br /> until all principal,interest,and late charges,if any,are paid in full,the BORROWER grants to SECURED PARTY a security interest <br /> in the PLEDGED POWER REVENUES,as defined in the LOAN RESOLUTION attached as APPENDIX 4 and the SECURITY AGREEMENT, <br /> attached as APPENDIX 5 to the LOAN CoNTRAcr. <br /> BORROWER EXPRESSLY WARRANTS AND COVENANTS: <br /> 1. That except for the security interest granted hereby and any other security interests described in Section 5 of the LOAN <br /> CONTRACT,PROJECT SUMMARY,the BORROWER is the owner of the PLEDGED POWER REVENUES free from any adverse lien, <br /> security interest or encumbrances;and that the BORROWER will defend the PLEDGED POWER REvENuEs against all claims <br /> 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 the BORROWER will not violate any law or agreement governing the <br /> BORROWER or to which the BORROWER is a party. <br /> 3. To not permit or allow any adverse lien, security interest or encumbrance whatsoever upon the PLEDGED POWER <br /> REvENuEs 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 LOAN CONTRACT and by its representations herein, <br /> the BORROWER shall be estopped from asserting for any reason that it is not authorized to grant a security interest in the <br /> PLEDGED POWER REVENUES pursuant to the terms of this agreement. <br /> a.Notwithstanding any other provision of the LOAN CONTRACT,any and all of the ENTERPRISE's obligations under the <br /> LOAN CONTRACT,whether financial or otherwise,shall be payable solely from the revenues,income,rents and receipts <br /> earned by the ENTERPRISE from or attributable to ownership and operation of the PROJEcr and are not payable from any <br /> other source whatsoever.Nothing herein shall be deemed to prevent the ENTERPRISE from making any payments from <br /> any other legally available source. <br /> b.In no event shall the ENTERPRISE be required to spend money from taxes in violation of Section 20(4)of Article X <br /> of the Colorado Constitution in the performance of its obligations under the Loan Contract or which would cause the <br /> ENTERPRISE to lose its enterprise status as such status is defined in the Colorado Constitution. <br /> c.In addition,the ENTERPRISE shall not be required to expend any funds or impair any assets of the Southeastern <br /> Colorado Water Conservancy District in the performance of the obligations under the LOAN CoNTRAcr.The obligations <br /> of the ENTERPRISE under the LOAN CONTRAcr do not constitute a debt or indebtedness of the Southeastern Colorado <br /> Water Conservancy District within the meaning of any constitutional,charter or statutory provision or limitation,and <br /> shall not be considered or held to be a general obligation of the Southeastern Colorado Water Conservancy District. <br /> 5. To pay all taxes and assessments of every nature that may be levied or assessed against the PLEDGED POWER REVENUES. <br /> 6. That the BORROWER'S articles of incorporation and by-laws do not prohibit any term or condition of this agreement. <br /> UNTIL DEFAULT BORROWER may have possession of the PLEDGED POWER REVENUES,provided that BORROWER keeps <br /> the PLEDGED POWER REVENUES in an account separate from other revenues of BORROWER and does not use PLEDGED POWER <br /> REvENuEs for any purpose not permitted by the LOAN CoNTRAcr. Upon default,SECURED PARTY shall have the immediate right <br /> to the possession of the PLEDGED POWER REVENUES. <br /> Appendix 5 <br /> Page i Of 2 <br />