MORTGAGE DEED, SECURITY AGREEMENT, AND
                               FINANCING STATEMENT


     This  Mortgage Deed, Security Agreement, and Financing Statement ("Mortgage
Deed")  is  dated  the  11th  day of April, 1996, between the State of Colorado,
acting by and through the State Board of Land Commissioners (the "Land Board" or
"Mortgagee"),  whose  address  is  620 Centennial Building, 1313 Sherman Street,
Denver,  Colorado  80203,  and  Pure  Cycle  Corporation, a Delaware corporation
("Pure Cycle" or "Mortgagor"), whose address is 5650 York Street, Commerce City,
Colorado  80022.  The Land Board is the Secured Party/Creditor and Pure Cycle is
the  Debtor.

     WITNESSETH,  that  in  order  to  secure the payment of certain obligations
under  an  agreement entitled Comprehensive Amendment Agreement No. 1 among Pure
Cycle,  the  Land  Board,  and  others  dated April 11, 1996 (the "Comprehensive
Agreement"),  the Mortgagor does hereby grant, bargain, sell, convey, and assign
unto  the  Mortgagee, its successors and assigns, the Export Water (as that term
is  defined in the Amended and Restated Lease Agreement No. S-38280, dated April
11, 1996, between Rangeview Metropolitan District, a quasi-municipal corporation
and  political  subdivision  of the State of Colorado, acting by and through its
water  activity enterprise, and the Land Board recorded with the Arapahoe County
Clerk  and  Recorder  at  Book  No.  ________,  Page No. ________ (Reception No.
________),  which  definition of Export Water is incorporated by this reference)
which Export Water is located on and under that certain real property consisting
of  approximately  24,567.21  acres,  more or less, according to U.S. Government
Survey,  in  Arapahoe  County,  Colorado, more particularly described as follows
(the  "Lowry  Range"):

          Township  5  South,  Range  64  West  of  the  6th  P.M.,
          --------------------------------------------------------
          Sections  7  through  10:  all;
          Sections  15  through  22:  all;
          Sections  27  through  34:  all.

          Township  4  South,  Range  65  West  of  the  6th  P.M.,
          --------------------------------------------------------
          Sections  33:  all  and  34:  all.

          Township  5  South,  Range  65  West  of  the  6th  P.M.,
          --------------------------------------------------------
          Section  3:  all;  Sections 10 through 15: all, less certain
          surface  rights  granted  for  the  Aurora  Reservoir  (but
          including  the  water under the Aurora Reservoir) in Section
          15; Sections 22 through 27: all, less certain surface rights
          granted  for  the  Aurora Reservoir (but including the water
          under  the  Aurora Reservoir) in Section 22; Sections 35 and
          36:  all;  Section  34:  north  2,183.19  feet.


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          Township  5  South,  Range  66  West  of  the  6th  P.M.,
          --------------------------------------------------------
          Section  36:  all

          (a street address of the Lowry Range does not exist);

     TO HAVE AND TO HOLD the same, together with all and singular the privileges
and  appurtenances  thereunto  belonging  forever;  provided always, that if the
Mortgagor  or  its  successor  or  assigns  shall pay or cause to be paid to the
Mortgagee, or its successors or assigns, the obligations under the Comprehensive
Agreement  in accordance with the terms of the Comprehensive Agreement and shall
in  the meantime keep and perform the covenants and agreements herein contained,
then  these  presents shall be null and void, but otherwise remain in full force
and  effect.

     This  Mortgage  Deed  shall  constitute  a security agreement and financing
statement,  in  accordance  with  the  Uniform Commercial Code of Colorado, with
respect  to  all personal property and fixtures included within the Export Water
located on and under the Lowry Range.  Mortgagor, as Debtor, does hereby grant a
security  interest  in  the  Export Water, and all its substitutions, additions,
replacements  and  proceeds,  to  the  Mortgagee,  as  Secured  Party.

     That  the  Mortgagor,  for itself and its successors and assigns, covenants
and  agrees to and with the Mortgagee, its successors and assigns, that it holds
the  said  premises  free  and  clear  of  all  liens and encumbrances, that the
Mortgagor  will  pay  in  due  season  all  taxes and assessments levied on said
premises;  that  it  will  pay  the  costs  and  attorneys' fees incurred by the
Mortgagee,  or  its successors and assigns in any foreclosure action, other suit
or  proceeding,  by  reason  hereof; and that upon default in the payment of the
obligations  under  the Comprehensive Agreement or any part thereof, or upon the
breach  of  any  of  the covenants or agreements herein contained; this Mortgage
Deed  may  be  forthwith  foreclosed.

     IN  WITNESS  WHEREOF,  the Mortgagor has executed this Mortgage Deed on the
date  set  forth  above.

                                        PURE  CYCLE  CORPORATION
Attest:


By:  /s/  Mark  W.  Harding             By:  /s/  Thomas  P.  Clark
     --------------------------------        ---------------------------------
     Mark  W.  Harding,  Secretary           Thomas  P.  Clark,  President
                                        Tax  Payer  ID  No.   84-0705083
                                                              ----------------


                                      -2-
<PAGE>
STATE  OF  COLORADO     )
   City  and            )  ss.
COUNTY  OF    Denver    )
            ----------

     The  foregoing  instrument  was  acknowledged  before me this   9th__day of
                                                                   -----
April,  1996,  on  behalf  of  Pure  Cycle  Corporation,  by Thomas P. Clark, as
President,  and  by  Mark  W.  Harding,  as  Secretary.

     Witness  my  hand  and  official  seal.

     My  commission  expires:   July  17,  1996
                               ----------------


                                        /s/  Joan  M.  Brennan
                                        -----------------------------------
                                        Notary  Public


                                      -3-
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