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SECURITY AGREEMENT (PLEDGE OF REVENUES) DATE: NOVEMBER10,2002 DEBTOR: EASi DILLON WATER DISTRICT SECURED PARTY: COLORADO WATER CONSERVATION BOARD 1313 SHERMAN STREET, ROOM 721 DENVER, CO 80203 PROMISSORY NOTE: $2,550,000, DATED NOVEMBER 10, 2002 TERMS: REPAYMENT PERIOD OF 30 YEARS, INTEREST AT T\-\E RATE OF 4.25% PER ANNUM LOAN CONTRACT: C1501 00, DATED NOVEMBER 10,2002 COLLATERAL: General revenues received from taxes received each year as authorized by the BORROWER'S May 7, 2002 election and its resolution(s) attached as Appendix 3 to the LOAN CONTRACT, and any other funds legally available to the BORROWER, in an amount sufficient to pay the annual payment due under the LOAN CONTRACT, as described in Pledge of Revenue provisions of the LOAN CONTRACT. To secure payment of the loan evidenced by the PROMISSORY NOTE payable in accordance with the TERMS, 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 6 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 dellvery of this agreement by DEBTOR will not violate any law or agreement goveming DEBTOR or to which DEBTOR Is a party. 3. That the DEBTOR'S articles of incorporation and by-laws do not prohibit any term or condition of this agreement. 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. 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. 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 Appendix 4 to Loan Contract C1501 00