Document:

<PAGE>
                                                                               .
                                                                               .
                                                                               .
                                                                    EXHIBIT 10.3

                                PROMISSORY NOTE
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
  PRINCIPAL          LOAN DATE         MATURITY       LOAN NO.       CALL / COLL         ACCOUNT           OFFICER        INITIALS
<S>                  <C>              <C>             <C>            <C>                 <C>               <C>            <C>
$4,000,000.00        03-28-2003       04-30-2006        55032            6001                                360
------------------------------------------------------------------------------------------------------------------------------------
    References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular
                   loan or item. Any item above containing "***" has been omitted due to text length limitations.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                                       <C>
BORROWER: NORTH & SOUTH ASPEN, LLC (TIN: 84-1230113)      LENDER: WESTSTAR BANK
          SARDY HOUSE, LLC (TIN: 75-3099118)                      ASPEN OFFICE
          200 S. ASPEN STREET                                     PO BOX 11510
          ASPEN, CO 81611                                         400 EAST MAIN STREET SUITE 101
                                                                  ASPEN, CO 81612
                                                                  (970) 925-7323
</TABLE>

Principal Amount: $4,000,000.00                    Date of Note:  March 28, 2003

PROMISE TO PAY. North & South Aspen, LLC; and Sardy House, LLC ("Borrower")
jointly and severally promise to pay to WestStar Bank ("Lender"), or order, in
lawful money of the United States of America, the principal amount of Four
Million & 00/100 Dollars ($4,000,000.00), together with interest on the unpaid
principal balance from March 28, 2003, until paid in full. The interest rate
will not increase above 21.000%.

PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in accordance with the following payment schedule:
18 monthly consecutive interest payments, beginning April 30, 2003, with
interest calculated on the unpaid principal balances at an interest rate based
on the WestStar Bank Base (currently 5.250%), adjusted if necessary for the
minimum and maximum rate limitations for this loan, resulting in an initial
interest rate of 7.000%; 17 monthly consecutive principal payments of $8,002.00
each, beginning October 30, 2004, with interest calculated on the unpaid
principal balances at an interest rate based on the WestStar Bank Base
(currently 5.250%), adjusted if necessary for the minimum and maximum rate
limitations for this loan, resulting in an initial interest rate of 7.000%; 17
monthly consecutive interest payments, beginning October 30, 2004, with interest
calculated on the unpaid principal balances at an interest rate based on the
WestStar Bank Base (currently 5.250%), adjusted if necessary for the minimum and
maximum rate limitations for this loan, resulting in an initial interest rate of
7.000%; and one principal and interest payment of $3,909,796.93 on April 30,
2006, with interest calculated on the unpaid principal balances at an interest
rate based on the WestStar Bank Base (currently 5.250%), adjusted if necessary
for the minimum and maximum rate limitations for this loan, resulting in an
initial interest rate of 7.000%. This estimated final payment is based on the
assumption that all payments will be made exactly as scheduled and that the
index does not change; the actual final payment will be for all principal and
accrued interest not yet paid, together with any other unpaid amounts under this
Note. Unless otherwise agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges. The annual interest rate
for this Note is computed on a 365/360 basis; that is, by applying the ratio of
the annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal balance
is outstanding. Borrower will pay Lender at Lender's address shown above or at
such other place as Lender may designate in writing.

<PAGE>

                                PROMISSORY NOTE
LOAN NO. 55032                    (CONTINUED)                             PAGE 2

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index which is the WestStar Bank Base (the
"Index"). The Index is not necessarily the lowest rate charged by Lender on its
loans and is set by Lender in its sole discretion. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute
index after notifying Borrower. Lender will tell Borrower the current Index rate
upon Borrower's request. The interest rate change will not occur more often than
each day. Borrower understands that Lender may make loans based on other rates
as well. THE INDEX CURRENTLY IS 5.250% PER ANNUM. THE INTEREST RATE OR RATES TO
BE APPLIED TO THE UNPAID PRINCIPAL BALANCE OF THIS NOTE WILL BE THE RATE OR
RATES SET FORTH HEREIN IN THE "PAYMENT" SECTION. NOTWITHSTANDING ANY OTHER
PROVISION OF THIS NOTE, AFTER THE FIRST PAYMENT STREAM, THE INTEREST RATE FOR
EACH SUBSEQUENT PAYMENT STREAM WILL BE EFFECTIVE AS OF THE LAST PAYMENT DATE OF
THE JUST-ENDING PAYMENT STREAM. NOTWITHSTANDING THE FOREGOING, THE VARIABLE
INTEREST RATE OR RATES PROVIDED FOR IN THIS NOTE WILL BE SUBJECT TO THE
FOLLOWING MINIMUM AND MAXIMUM RATES. NOTICE: Under no circumstances will the
interest rate on this Note be less than 7.000% per annum or more than (except
for any higher default rate shown below) the lesser of 21.000% per annum or the
maximum rate allowed by applicable law. Whenever increases occur in the interest
rate, Lender, at its option, may do one or more of the following: (A) increase
Borrower's payments to ensure Borrower's loan will pay off by its original final
maturity date, (B) increase Borrower's payments to cover accruing interest, (C)
increase the number of Borrower's payments, and (D) continue Borrower's payments
at the same amount and increase Borrower's final payment.

PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and
other prepaid finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary or as a
result of default), except as otherwise required by law. In any event, even upon
full prepayment of this Note, Borrower understands that Lender is entitled to a
minimum interest charge of $25.00. Other than Borrower's obligation to pay any
minimum interest charge, Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not, unless agreed
to by Lender in writing, relieve Borrower of Borrower's obligation to continue
to make payments under the payment schedule. Rather, early payments will reduce
the principal balance due and may result in Borrower's making fewer payments.
Borrower agrees not to send Lender payments marked "paid in full", "without
recourse", or similar language. If Borrower sends such a payment, Lender may
accept it without losing any of Lender's rights under this Note, and Borrower
will remain obligated to pay any further amount owed to Lender. All written
communications concerning disputed amounts, including any check or other payment
instrument that indicates that the payment constitutes "payment in full" of the
amount owed or that is tendered with other conditions or limitations or as full
satisfaction of a disputed amount must be mailed or delivered to: WestStar Bank,
ASPEN OFFICE, PO BOX 11510, 400 EAST MAIN STREET SUITE 101, ASPEN, CO 81612.

LATE CHARGE. If a payment is 11 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $15.00, whichever is greater.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Note to 21.000% per annum. The
interest rate will not exceed the maximum rate permitted by applicable law.

DEFAULT.  Each of the following shall constitute an event of default ("Event of
Default") under this Note:

                                       2
<PAGE>

                                PROMISSORY NOTE
LOAN NO. 55032                    (CONTINUED)                             PAGE 3

         PAYMENT DEFAULT.  Borrower fails to make any payment when due under
         this Note,

         OTHER DEFAULTS. Borrower fails to comply with or to perform any other
         term, obligation, covenant or condition contained in this Note or in
         any of the related documents or to comply with or to perform any term,
         obligation, covenant or condition contained in any other agreement
         between Lender and Borrower.

         DEFAULT IN FAVOR OF THIRD PARTIES. Borrower or any Grantor defaults
         under any loan, extension of credit, security agreement, purchase or
         sales agreement, or any other agreement, in favor of any other creditor
         or person that may materially affect any Borrower's property or
         Borrower's ability to repay this Note or perform Borrower's obligations
         under this Note or any of the related documents.

         FALSE STATEMENTS. Any warranty, representation or statement made or
         furnished to Lender by Borrower or on Borrower's behalf under this Note
         or the related documents is false or misleading in any material
         respect, either now or at the time made or furnished or becomes false
         or misleading at any time thereafter.

         DEATH OR INSOLVENCY. The dissolution of Borrower (regardless of whether
         election to continue is made), any member withdraws from Borrower, or
         any other termination of Borrower's existence as a going business or
         the death of any member, the insolvency of Borrower, the appointment of
         a receiver for any part of Borrower's property, any assignment for the
         benefit of creditors, any type of creditor workout, or the commencement
         of any proceeding under any bankruptcy or insolvency laws by or against
         Borrower.

         CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
         forfeiture proceedings, whether by judicial proceeding, self-help,
         repossession or any other method, by any creditor of Borrower or by any
         governmental agency against any collateral securing the loan. This
         includes a garnishment of any of Borrower's accounts, including deposit
         accounts, with Lender. However, this Event of Default shall not apply
         if there is a good faith dispute by Borrower as to the validity or
         reasonableness of the claim which is the basis of the creditor or
         forfeiture proceeding and if Borrower gives Lender written notice of
         the creditor or forfeiture proceeding and deposits with Lender monies
         or a surety bond for the creditor or forfeiture proceeding, in an
         amount determined by Lender, in its sole discretion, as being an
         adequate reserve or bond for the dispute.

         EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
         respect to any Guarantor of any of the indebtedness or any Guarantor
         dies or becomes incompetent, or revokes or disputes the validity of, or
         liability under, any guaranty of the indebtedness evidenced by this
         Note.

         ADVERSE CHANGE. A material adverse change occurs in Borrower's
         financial condition, or Lender believes the prospect of payment or
         performance of this Note is impaired.

         INSECURITY.  Lender in good faith believes itself insecure.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

                                       3

<PAGE>

                                PROMISSORY NOTE
LOAN NO. 55032                    (CONTINUED)                             PAGE 4

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's attorneys' fees
and Lender's legal expenses, whether or not there is a lawsuit, including
without limitation all attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), and appeals. If not prohibited by applicable law, Borrower also
will pay any court costs, in addition to all other sums provided by law.

GOVERNING LAW. THIS NOTE WILL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE STATE OF COLORADO. THIS NOTE HAS
BEEN ACCEPTED BY LENDER IN THE STATE OF COLORADO.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.

COLLATERAL. Borrower acknowledges this Note is secured by the following
collateral described in the security instruments listed herein, all the terms
and conditions of which are hereby incorporated and made a part of this Note:

         (A) a Construction Deed of Trust dated March 28, 2003, to the Public
         Trustee for the benefit of Lender on real property located in Pitkin
         County, State of Colorado.

         (B) inventory, chattel paper, accounts, equipment, general intangibles
         and fixtures described in a Commercial Security Agreement dated March
         28, 2003.

LOAN CONDITIONS, COVENANTS AND MONITORING. Borrower will need to have pre-sold
membership units with a total value of not less than 4.5 million by March 1,
2005 otherwise Borrower must list for sale the subject property as a
single-family residence or repay the subject loan in full. Contracts shall be in
form and substance satisfactory to Bank, in its sole discretion.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Each Borrower understands and
agrees that, with or without notice to Borrower, Lender may with respect to any
other Borrower (a) make one or more additional secured or unsecured loans or
otherwise extend additional credit; (b) alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or other
terms any indebtedness, including increases and decreases of the rate of
interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or
decide not to perfect, and release any security, with or without the
substitution of new collateral; (d) apply such security and direct the

                                       4

<PAGE>

                                PROMISSORY NOTE
LOAN NO. 55032                    (CONTINUED)                             PAGE 5

order or manner of sale thereof, including without limitation, any non-judicial
sale permitted by the terms of the controlling security agreements, as Lender in
its discretion may determine; (e) release, substitute, agree not to sue, or deal
with any one or more of Borrower's sureties, endorsers, or other guarantors on
any terms or in any manner Lender may choose; and (f) determine how, when and
what application of payments and credits shall be made on any other indebtedness
owing by such other Borrower. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.

PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER
AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

NORTH & SOUTH ASPEN, LLC,

By:   /S/ DANIEL D. DELANO                     By:    /S/ FRANK S. PETERS
   -------------------------------                 ----------------------------
   Daniel D. Delano, Manager                       Frank S. Peters, Manager
   of North & South Aspen, LLC.                    of North & South Aspen, LLC

SARDY HOUSE, LLC

BLOCK 66, LLC, Manager of
Sardy House, LLC

By:   /S/ DANIEL D. DELANO                     By:    /S/ FRANK S. PETERS
   -------------------------------                 ----------------------------
   Daniel D. Delano, Manager                       Frank S. Peters, Manager
   of Block 66, LLC                                of Block 66, LLC

                                        5

<PAGE>

                                PROMISSORY NOTE
LOAN NO. 55032                    (CONTINUED)                             PAGE 6

                               NOTICE TO COSIGNER

You are being asked to guarantee this debt. Think carefully before you do. If
the borrower doesn't pay the debt, you will have to. Be sure you can afford to
pay if you have to, and that you want to accept this responsibility.

You may have to pay up to the full amount of the debt if the borrower does not
pay. You may also have to pay late fees or collection costs, which increase this
amount.

The Lender can collect this debt from you without first trying to collect from
the borrower. The Lender can use the same collection methods against you that
can be used against the borrower, such as suing you, garnishing your wages, etc.
If this debt is ever in default, that fact may become a part of YOUR credit
record.

This notice is not the contract that makes you liable for the debt.

                                       6<PAGE>
                                                                               .
                                                                               .
                                                                               .
                                                                    EXHIBIT 10.4

                     COMMERCIAL SECURITY AGREEMENT

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
  PRINCIPAL     LOAN DATE      MATURITY      LOAN NO.    CALL / COLL     ACCOUNT      OFFICER      INITIALS
<S>             <C>           <C>            <C>         <C>             <C>          <C>          <C>
$4,000,000.00   03-28-2003    04-30-2006      55032         6001                        360
------------------------------------------------------------------------------------------------------------
                References in the shaded area are for Lender's use only and do not limit the
                  applicability of this document to any particular loan or item. Any item
                  above containing "***" has been omitted due to text length limitations.
------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S><C>
BORROWER:  NORTH & SOUTH ASPEN, LLC (TIN: 84-1230113)         LENDER:   WESTSTAR BANK
           SARDY HOUSE, LLC (TIN: 75-3099118)                           ASPEN OFFICE
           200 S. ASPEN STREET                                          PO BOX 11510
           ASPEN, CO 81611                                              400 EAST MAIN STREET SUITE 101
                                                                        ASPEN, CO 81612
                                                                        (970) 925-7323
</TABLE>

THIS COMMERCIAL SECURITY AGREEMENT dated March 28, 2003, is made end executed
between North & South Aspen, LLC; and Sardy House, LLC ("Grantor") and WestStar
Bank ("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a security interest in the Collateral to secure the Indebtedness and agrees that
Lender shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender may have by law.

COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a security interest for the payment of the
Indebtedness and performance of all other obligations under the Note and this
Agreement:

ALL IMPROVEMENTS, FIXTURES, EQUIPMENT, CONSTRUCTION MATERIALS, AND OTHER ITEMS
AS LOCATED ON THE PROPERTY.

In addition, the word "Collateral" also includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:

         (A) All accessions, attachments, accessories, tools, parts, supplies,
         replacements of and additions to any of the collateral described
         herein, whether added now or later.

         (B) All products and produce of any of the property described in this
         Collateral section.

         (C) All accounts, general intangibles, instruments, rents, monies,
         payments, and all other rights, arising out of a sale, lease, or other
         disposition of any of the property described in this Collateral
         section.

         (D) All proceeds (including insurance proceeds) from the sale,
         destruction, loss, or other disposition of any of the property
         described in this Collateral section, and sums due from a third party
         who has damaged or destroyed the Collateral or from that party's
         insurer, whether due to judgment, settlement or other process.

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                            PAGE 2

         (E) All records and data relating to any of the property described in
         this Collateral section, whether in the form of a writing, photograph,
         microfilm, microfiche, or electronic media, together with all of
         Grantor's right, title, and interest in and to all computer software
         required to utilize, create, maintain, and process any such records or
         data on electronic media.

Despite any other provision of this Agreement, Lender is not granted, and will
not have, a nonpurchase money security interest in household goods, to the
extent such a security interest would be prohibited by applicable law. In
addition, if because of the type of any Property, Lender is required to give a
notice of the right to cancel under Truth in Lending for the Indebtedness, then
Lender will not have a security interest in such Collateral unless and until
such a notice is given.

Some or all of the Collateral may be located on the following described real
estate:

         ALL THE LOTS P, Q, R, AND S AND LOTS F, G, H AND I LESS THE NORTHERLY
         75 FEET THEREOF AND THAT PART OF THE VACATED ALLEY BOUNDED BY THE
         EXTENSION OF THE EASTERLY LOT LINES OF LOTS I AND S AND THE WESTERLY
         LOT LINES OF LOTS F AND P, ALL IN BLOCK 66, CITY AND TOWNSITE OF ASPEN,
         COUNTY OF PITKIN, STATE OF COLORADO.

CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures all
Obligations, debts and liabilities, plus interest thereon, of Grantor to Lender,
or any one or more of them, as well as all claims by Lender against Grantor or
any one or more of them, whether now existing or hereafter arising, whether
related or unrelated to the purpose of the Note, whether voluntary or otherwise,
whether due or not due, direct or indirect, determined or undetermined, absolute
or contingent, liquidated or unliquidated whether Grantor may be liable
individually or jointly with others, whether obligated as guarantor, surety,
accommodation party or otherwise, and whether recovery upon such amounts may be
or hereafter may become barred by any statute of limitations, and whether the
obligation to repay such amounts may be or hereafter may become otherwise
unenforceable.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Grantor's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Grantor holds
jointly with someone else and all accounts Grantor may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.

GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Grantor represents and promises to Lender that:

         PERFECTION OF SECURITY INTEREST. Grantor agrees to execute financing
         statements and to take whatever other actions are requested by Lender
         to perfect and continue Lender's security interest in the Collateral.
         Upon request of Lender, Grantor will deliver to Lender any and all of
         the documents evidencing or constituting the Collateral, and Grantor
         will note Lender's interest upon any and all chattel paper if not
         delivered to Lender for possession by Lender. This is a continuing
         Security Agreement and will

                                       2

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                            PAGE 3

         continue in effect even though all or any part of the Indebtedness is
         paid in full and even though for a period of time Grantor may not be
         Indebted to Lender.

         NOTICES TO LENDER. Grantor will promptly notify Lender in writing at
         Lender's address shown above (or such other addresses as Lender may
         designate from time to time) prior to any (1) change in Grantor's name;
         (2) change in Grantor's assumed business name(s); (3) change in the
         management or in the members or managers of the limited liability
         company Grantor; (4) change in the authorized signer(s); (5) change in
         Grantor's principal office address; (6) change in Grantor's state of
         organization; (7) conversion of Grantor to a new or different type of
         business entity; or (8) change in any other aspect of Grantor that
         directly or indirectly relates to any agreements between Grantor and
         Lender. No change in Grantor's name or state of organization will take
         effect until after Lender has received notice.

         NO VIOLATION. The execution and delivery of this Agreement will not
         violate any law or agreement governing Grantor or to which Grantor is a
         party, and its membership agreement does not prohibit any term or
         condition of this Agreement.

         ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
         accounts, chattel paper, or general intangibles, as defined by the
         Uniform Commercial Code, the Collateral is enforceable in accordance
         with its terms, is genuine, and fully complies with all applicable laws
         and regulations concerning form, content and manner of preparation and
         execution, and all persons appearing to be obligated on the Collateral
         have authority and capacity to contract and are in fact obligated as
         they appear to be on the Collateral. At the time any Account becomes
         subject to a security interest in favor of Lender, the Account shall be
         a good and valid account representing an undisputed, bona fide
         Indebtedness incurred by the account debtor, for merchandise held
         subject to delivery instructions or previously shipped or delivered
         pursuant to a contract of sale, or for services previously performed by
         Grantor with or for the account debtor. So long as this Agreement
         remains in effect, Grantor shall not, without Lender's prior written
         consent, compromise, settle, adjust, or extend payment under or with
         regard to any such Accounts. There shall be no setoffs or counterclaims
         against any of the Collateral, and no agreement shall have been made
         under which any deductions or discounts may be claimed concerning the
         Collateral except those disclosed to Lender in writing.

         LOCATION OF THE COLLATERAL. Except in the ordinary course of Grantor's
         business, Grantor agrees to keep the Collateral (or to the extent the
         Collateral consists of intangible property such as accounts or general
         intangibles, the records concerning the Collateral) at Grantor's
         address shown above or at such other locations as are acceptable to
         Lender. Upon Lender's request, Grantor will deliver to Lender in form
         satisfactory to Lender a schedule of real properties and Collateral
         locations relating to Grantor's operations, including without
         limitation the following: (1) all real property Grantor owns or is
         purchasing; (2) all real property Grantor is renting or leasing; (3)
         oil storage facilities Grantor owns, rents, leases, or uses; and (4)
         all other properties where Collateral is or may be located.

         REMOVAL OF THE COLLATERAL. Except in the ordinary course of Grantor's
         business, including the sales of inventory, Grantor shall not remove
         the Collateral from its existing location without Lender's prior
         written consent. To the extent that the Collateral consists of
         vehicles, or other titled property, Grantor shall not take or permit
         any action which would require application for certificates of title
         for the

                                       3

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                            PAGE 4

         vehicles outside the State of Colorado, without Lender's prior written
         consent. Grantor shall, whenever requested, advise Lender of the exact
         location of the Collateral.

         TRANSACTIONS INVOLVING COLLATERAL. Except for Inventory sold or
         accounts collected in the ordinary course of Grantor's business, or as
         otherwise provided for in this Agreement, Grantor shall not sell, offer
         to sell, or otherwise transfer or dispose of the Collateral. While
         Grantor is not in default under this Agreement, Grantor may sell
         inventory, but only in the ordinary course of its business and only to
         buyers who qualify as a buyer in the ordinary course of business. A
         sale in the ordinary course of Grantor's business does not include a
         transfer in partial or total satisfaction of a debt or any bulk sale.
         Grantor shall not pledge, mortgage, encumber or otherwise permit the
         Collateral to be subject to any lien, security interest, encumbrance,
         or charge, other than the security interest provided for in this
         Agreement, without the prior written consent of Lender. This includes
         security Interests even if junior in right to the security interests
         granted under this Agreement. Unless waived by Lender, all proceeds
         from any disposition of the Collateral (for whatever reason) shall be
         held in trust for Lender and shall not be commingled with any other
         funds; provided however, this requirement shall not constitute consent
         by Lender to any sole or other disposition. Upon receipt, Grantor shall
         immediately deliver any such proceeds to Lender.

         TITLE. Grantor represents and warrants to Lender that Grantor holds
         good and marketable title to the Collateral free and clear of all liens
         and encumbrances except for the lien of this Agreement. No financing
         statement covering any of the Collateral is on file in any public
         office other than those which reflect the security interest created by
         this Agreement or to which Lender has specifically consented. Grantor
         shall defend Lender's rights in the Collateral against the claims and
         demands of all other persons.

         REPAIRS AND MAINTENANCE. Grantor agrees to keep and maintain, and to
         cause others to keep and maintain, the Collateral in good order, repair
         and condition at all times while this Agreement remains in effect.
         Grantor further agrees to pay when due all claims for work done on, or
         services rendered or material furnished in connection with the
         Collateral so that no lien or encumbrance may ever attach to or be
         filed against the Collateral.

         INSPECTION OF COLLATERAL. Lender and Lender's designated
         representatives and agents shall have the right at all reasonable times
         to examine and inspect the Collateral wherever located.

         TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
         assessments and liens upon the Collateral, its use or operation, upon
         this Agreement, upon any promissory note or notes evidencing the
         Indebtedness, or upon any of the other Related Documents. Grantor may
         withhold any such payment or may elect to contest any lien if Grantor
         is in good faith conducting an appropriate proceeding to contest the
         obligation to pay and so long as Lender's interest in the Collateral is
         not jeopardized in Lender's sole opinion. If the Collateral is
         subjected to a lien which is not discharged within fifteen (15) days,
         Grantor shall deposit with Lender cash, a sufficient corporate surety
         bond or other security satisfactory to Lender in an amount adequate to
         provide for the discharge of the lien plus any interest, costs,
         attorneys' fees or other charges that could accrue as a result of
         foreclosure or sale of the Collateral. In any contest Grantor

                                       4

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                            PAGE 5

         shall defend itself and Lender and shall satisfy any final adverse
         judgment before enforcement against the Collateral. Grantor shall name
         Lender as an additional obligee under any surety bond furnished in the
         contest proceedings. Grantor further agrees to furnish Lender with
         evidence that such taxes, assessments, and governmental and other
         charges have been paid in full and in a timely manner. Grantor may
         withhold any such payment or may elect to contest any lien if Grantor
         is in good faith conducting an appropriate proceeding to contest the
         obligation to pay and so long as Lender's Interest in the Collateral is
         not jeopardized.

         COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply
         promptly with all laws, ordinances, rules and regulations of all
         governmental authorities, now or hereafter in effect, applicable to the
         ownership, production, disposition, or use of the Collateral, including
         all laws or regulations relating to the undue erosion of
         highly-erodible land or relating to the conversion of wetlands for the
         production of an agricultural product or commodity. Grantor may contest
         in good faith any such law, ordinance or regulation and withhold
         compliance during any proceedings including appropriate appeals, so
         long as Lender's interest in the Collateral, in Lender's opinion, is
         not jeopardized

         HAZARDOUS SUBSTANCES. Grantor represents and warrants that the
         Collateral never has been, and never will be so long as this Agreement
         remains a lien on the Collateral, used in violation of any
         Environmental Laws or for the generation, manufacture, storage,
         transportation, treatment, disposal, release or threatened release of
         any Hazardous Substance. The representations and warranties contained
         herein are based on Grantor's due diligence in investigating the
         Collateral for Hazardous Substances. Grantor hereby (1) releases and
         waives any future claims against Lender for indemnity or contribution
         in the event Grantor becomes liable for cleanup or other costs under
         any Environmental Laws, and (2) agrees to indemnify and hold harmless
         Lender against any and all claims and losses resulting from a breach of
         this provision of this Agreement. This obligation to indemnify shall
         survive the payment of the Indebtedness and the satisfaction of this
         Agreement.

         MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain
         all risks insurance, including without limitation fire, theft and
         liability coverage together with such other insurance as Lender may
         require with respect to the Collateral, in form, amounts, coverages and
         basis reasonably acceptable to Lender and issued by a company or
         companies reasonably acceptable to Lender. Grantor, upon request of
         Lender, will deliver to Lender from time to time the policies or
         certificates of insurance in form satisfactory to Lender, including
         stipulations that coverages will not be cancelled or diminished without
         at least ten (10) days' prior written notice to Lender and not
         including any disclaimer of the insurer's liability for failure to give
         such a notice. Each insurance policy also shall include an endorsement
         providing that coverage in favor of Lender will not be impaired in any
         way by any act, omission or default of Grantor or any other person. In
         connection with all policies covering assets in which Lender holds or
         is offered a security interest, Grantor will provide Lender with such
         loss payable or other endorsements as Lender may require. If Grantor at
         any time fails to obtain or maintain any insurance as required under
         this Agreement, Lender may (but shall not be obligated to) obtain such
         insurance as Lender deems appropriate, including if Lender so chooses
         "single interest insurance," which will cover only Lender's interest in
         the Collateral.

                                       5

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                            PAGE 6

         APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender
         of any lose or damage to the Collateral. Lender may make proof of loss
         if Grantor fails to do so within fifteen (15) days of the casualty. All
         proceeds of any insurance on the Collateral, including accrued proceeds
         thereon, shall be held by Lender as part of the Collateral. If Lender
         consents to repair or replacement of the damaged or destroyed
         Collateral, Lender shall, upon satisfactory proof of expenditure, pay
         or reimburse Grantor from the proceeds for the reasonable cost of
         repair or restoration. If Lender does not consent to repair or
         replacement of the Collateral, Lender shall retain a sufficient amount
         of the proceeds to pay all of the Indebtedness, and shall pay the
         balance to Grantor. Any proceeds which have not been disbursed within
         six (6) months after their receipt and which Grantor has not committed
         to the repair or restoration of the Collateral shall be used to prepay
         the Indebtedness.

         INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
         reserves for payment of insurance premiums, which reserves shall be
         created by monthly payments from Grantor of a sum estimated by Lender
         to be sufficient to produce, at least fifteen (15) days before the
         premium due date, amounts at least equal to the insurance premiums to
         be paid. If fifteen (15) days before payment is due, the reserve funds
         are insufficient, Grantor shall upon demand pay any deficiency to
         Lender. The reserve funds shall be held by Lender as a general deposit
         and shall constitute a non-interest-bearing account which Lender may
         satisfy by payment of the insurance premiums required to be paid by
         Grantor as they become due. Lender does not hold the reserve funds in
         trust for Grantor, and Lender is not the agent of Grantor for payment
         of the insurance premiums required to be paid by Grantor. The
         responsibility for the payment of premiums shall remain Grantor's sole
         responsibility.

         INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
         Lender reports on each existing policy of insurance showing such
         information as Lender may reasonably request including the following:
         (1) the name of the insurer; (2) the risks insured; (3) the amount of
         the policy; (4) the property insured; (5) the then current value on the
         basis of which insurance has been obtained and the manner of
         determining that value; and (6) the expiration date of the policy. In
         addition, Grantor shall upon request by Lender (however not more often
         than annually) have an independent appraiser satisfactory to Lender
         determine, as applicable, the cash value or replacement cost of the
         Collateral.

         FINANCING STATEMENTS. Grantor authorizes Lender to file a UCC-1
         financing statement, or alternatively, a copy of this Agreement to
         perfect Lender's security interest. At Lender's request, Grantor
         additionally agrees to sign all other documents that are necessary to
         perfect, protect, and continue Lender's security interest in the
         Property. This includes making sure Lender is shown as the first and
         only security interest holder on the title covering the Property.
         Grantor will pay all filing fees, title transfer fees, and other fees
         and costs involved unless prohibited by law or unless Lender is
         required by law to pay such fees and costs. Grantor irrevocably
         appoints Lender to execute licensing statements and documents of title
         in Grantor's name and to execute all documents necessary to transfer
         title if there is a default. Lender may file a copy of this Agreement
         as a financing statement. If Grantor changes Grantor's name or address,
         or the name or address of any person granting a security interest under
         this Agreement changes, Grantor will promptly notify the Lender of such
         change.

GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal

                                       6

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                            PAGE 7

property and beneficial use of all the Collateral and may use it in any lawful
manner not inconsistent with this Agreement or the Related Documents, provided
that Grantor's right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by Lender is required by law to
perfect Lender's security interest in such Collateral. Until otherwise notified
by Lender, Grantor may collect any of the Collateral consisting of accounts. At
any time and even though no Event of Default exists, Lender may exercise its
rights to collect the accounts and to notify account debtors to make payments
directly to Lender for application to the Indebtedness. If Lender at any time
has possession of any Collateral, whether before or after an Event of Default,
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender's sole discretion, shall deem
appropriate under the circumstances, but failure to honor any request by Grantor
shall not of itself be deemed to be a failure to exercise reasonable care.
Lender shall not be required to take any steps necessary to preserve any rights
in the Collateral against prior parties, nor to protect, preserve or maintain
any security interest given to secure the Indebtedness.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amount;
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying oil taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B)
be added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

         PAYMENT DEFAULT. Grantor fails to make any payment when due under the
         Indebtedness.

         OTHER DEFAULTS. Grantor fails to comply with or to perform any other
         term, obligation, covenant or condition contained in this Agreement or
         in any of the Related Documents or to comply with or to perform any
         term, obligation, covenant or condition contained in any other
         agreement between Lender and Grantor.

         DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
         default under any loan, extension of credit, security agreement,
         purchase or sales agreement, or any other agreement, in favor of any
         other creditor or person that may materially affect any of Grantor's
         property or Grantor's or any Grantor's ability to repay the
         Indebtedness or perform their respective obligations under this
         Agreement or any of the Related Documents.

                                       7

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                            PAGE 8

         FALSE STATEMENTS. Any warranty, representation or statement made or
         furnished to Lender by Grantor or on Grantor's behalf under this
         Agreement or the Related Documents is false or misleading in any
         material respect, either now or at the time made or furnished or
         becomes false or misleading at any time thereafter.

         DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
         Documents ceases to be in full force and effect (including failure of
         any collateral document to create a valid and perfected Security
         interest or lien) at any time and for any reason.

         INSOLVENCY. The dissolution of Grantor (regardless of whether election
         to continue is made), any member withdraws from the limited liability
         company, or any other termination of Grantor's existence as a going
         business or the death of any member, the insolvency of Grantor, the
         appointment of a receiver for any part of Grantor's property, any
         assignment for the benefit of creditors, any type of creditor workout,
         or the commencement of any proceeding under any bankruptcy or
         insolvency laws by or against Grantor.

         CREDITOR OR FORECLOSURE PROCEEDINGS. Commencement of foreclosure or
         forfeiture proceedings, whether by judicial proceeding, self-help,
         repossession or any other method, by any creditor of Grantor or by any
         governmental agency against any collateral securing the Indebtedness.
         This includes a garnishment at any of Grantor's accounts, including
         deposit accounts, with Lender. However, this Event of Default shall not
         apply if there is a good faith dispute by Grantor as to the validity or
         reasonableness of the claim which is the basis of the creditor or
         forfeiture proceeding and if Grantor gives Lender written notice of the
         creditor or forfeiture proceeding and deposits with Lender monies or a
         surety bond for the creditor or forfeiture proceeding, in an amount
         determined by Lender, in its sole discretion, as being an adequate
         reserve or bond for the dispute.

         EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
         respect to Guarantor of any of the Indebtedness or Guarantor dies or
         becomes Incompetent or revokes or disputes the validity of, or
         liability under, any Guaranty of the Indebtedness.

         ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
         condition, or Lender believes the prospect of payment or performance of
         the Indebtedness is impaired.

         INSECURITY.  Lender in good faith believes itself insecure.

RIGHTS AND REMEDIES ON DEFAULT. In an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Colorado Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:

         ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
         including any prepayment penalty which Grantor would be required to
         pay, immediately due and payable, without notice of any kind to
         Grantor.

                                       8

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                            PAGE 9

         ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender
         all or any portion of the Collateral and any and all certificates of
         title and other documents relating to the Collateral, Lender may
         require Grantor to assemble the Collateral and make it available to
         Lender in a place to be designated by Lender. Lender also shall have
         full power to enter upon the property of Grantor to take possession of
         and remove the Collateral. If the Collateral contains other goods not
         covered by this Agreement at the time of repossession, Grantor agrees
         Lender may take such other goods, provided that Lender makes reasonable
         efforts to return them to Grantor after repossession.

         SELL THE COLLATERAL. Lender shall have full power to sell, lease,
         transfer, or otherwise deal with the Collateral or proceeds thereof in
         Lender's own name or that of Grantor. Lender may sell the Collateral at
         public auction or private sale. Unless the Collateral threatens to
         decline speedily in value or is of a type customarily sold on a
         recognized market, Lender will give Grantor, and other persons as
         required by law, reasonable notice of the time and place of any public
         sale, or the time after which any private sale or any other disposition
         of the Collateral is to be made. However, no notice need be provided to
         any person who, after Event of Default occurs, enters into and
         authenticates an agreement waiving that person's right to notification
         of sale. The requirements of reasonable notice shall be met if notice
         is given at least ten (10) days before the time of the sale or
         disposition. All expenses relating to the disposition of the
         Collateral, including without limitation the expenses of retaking,
         holding, insuring, preparing for sale end selling the Collateral, shall
         become a part of the Indebtedness secured by this Agreement and shall
         be payable on demand, with interest at the Note rate from date of
         expenditure until repaid.

         APPOINT RECEIVER. Lender shall have the right to have a receiver
         appointed to take possession of all or any part of the Collateral, with
         the power to protect and preserve the Collateral, to operate the
         Collateral preceding foreclosure or sale, and to collect the Rents from
         the Collateral and apply the proceeds, over and above the cost of the
         receivership, against the Indebtedness. The receiver may serve without
         bond if permitted by law. Lender's right to the appointment of a
         receiver shall exist whether or not the apparent value of the
         Collateral exceeds the Indebtedness by a substantial amount. Employment
         by Lender shall not disqualify a person from serving as a receiver.
         Receiver may be appointed by a court of competent jurisdiction upon ex
         parte application and without notice, notice being expressly waived.

         COLLECT REVENUES, Apply Accounts. Lender, either itself or through a
         receiver, may collect the payments, rents, income, and revenues from
         the Collateral. Lender may at any time in Lender's discretion transfer
         any Collateral into Lender's own name or that of Lender's nominee and
         receive the payments, rents, income, and revenues therefrom and hold
         the same as security for the Indebtedness or apply it to payment of
         this Indebtedness in such order of preference as Lender may determine,
         insofar as the Collateral consists of accounts, general intangibles,
         insurance policies, instruments, chattel paper, choses in action, or
         similar property, Lender may demand, collect, receipt for, settle,
         compromise, adjust, sue for, foreclose, or realize on the Collateral as
         Lender may determine, whether or not indebtedness or Collateral is then
         due. For these purposes, Lender may, on behalf of and in the name of
         Grantor, receive, open and dispose of mail addressed to Grantor; change
         any address to which mail and payments are to be sent; and endorse
         notes, checks, drafts, money orders, documents of title, instruments

                                       9

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                           PAGE 10

         and items pertaining to payment, shipment, or storage of any
         Collateral. To facilitate collection, Lender may notify account debtors
         and obligors on any Collateral to make payments directly to Lender.

         OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the
         Collateral, Lender may obtain a judgment against Grantor for any
         deficiency remaining on the Indebtedness due to Lender after
         application of all amounts received from the exercise of the rights
         provided in this Agreement. Grantor shall be liable for a deficiency
         even if the transaction described in this subsection is a sale of
         accounts or chattel paper.

         OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and
         remedies of a secured creditor under the provisions of the Uniform
         Commercial Code, as may be amended from time to time. In addition,
         Lender shall have and may exercise any or all other rights and remedies
         it may have available at law, in equity, or otherwise.

         ELECTION AT REMEDIES. Except as may be prohibited by applicable law,
         all of Lender's rights and remedies, whether evidenced by this
         Agreement, the Related Documents, or by any other writing, shall be
         cumulative and may be exercised singularly or concurrently. Election by
         Lender to pursue any remedy shall not exclude pursuit of any other
         remedy, and an election to make expenditures or to take action to
         perform an obligation of Grantor under this Agreement, after Grantor's
         failure to perform, shall not affect Lenders right to declare a default
         and exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

         AMENDMENTS. This Agreement, together with any Related Documents,
         constitutes the entire understanding and agreement of the parties as to
         the matters set forth in this Agreement. No alteration of or amendment
         to this Agreement shall be effective unless given in writing and signed
         by the party or parties sought to be charged or bound by the alteration
         or amendment.

         ATTORNEYS' FEES; EXPANSES. Grantor agrees to pay upon demand all of
         Lender's costs and expenses, including Lender's attorneys' fees and
         Lender's legal expenses, incurred in connection with the enforcement of
         this Agreement. Lender may hire or pay someone else to help enforce
         this Agreement, and Grantor shall pay the costs and expenses of such
         enforcement. Costs and expenses include Lender's attorneys' fees and
         legal expenses whether or not there is a lawsuit, including attorneys
         fees and legal expenses for bankruptcy proceedings including efforts to
         modify or vacate any automatic stay or injunction, appeals, and any
         anticipated post-judgment collection services. Grantor also shall pay
         all court costs and such additional fees as may be directed by the
         court.

         CAPTION HEADINGS. Caption headings in this Agreement are for
         convenience purposes only and are not to be used to interpret or define
         the provisions of this Agreement.

         GOVERNING LAW. This Agreement will be governed by, construed and
         enforced in accordance with federal law and the laws of the State of
         Colorado. This Agreement has been accepted by Lender in the State of
         Colorado.

                                       10

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                           PAGE 11

         JOINT AND SEVERAL LIABILITY. All obligations of Grantor under this
         Agreement shall be joint and several, and all references to Grantor
         shall mean each and every Grantor. This means that each Grantor signing
         below is responsible for all obligations in this Agreement. Where any
         one or more of the parties is a corporation, partnership, limited
         liability company or similar entity, it is not necessary for Lender to
         inquire into the powers of any of the officers, directors, partners,
         members, or other agents acting or purporting to act on the entity's
         behalf, and any obligations made or created in reliance upon the
         professed exercise of such powers shall be guaranteed under this
         Agreement.

         NO WAIVER BY LENDER. Lender shall not be deemed to have waived any
         rights under this Agreement unless such waiver is given in writing and
         signed by Lender. No delay or omission on the part of Lender in
         exercising any right shall operate as a waiver of such right or any
         other right. A waiver by Lender of a provision of this Agreement shall
         not prejudice or constitute a waiver of Lender's right otherwise to
         demand strict compliance with that provision or any other provision of
         this Agreement. No prior waiver by Lender, nor any course of dealing
         between Lender and Grantor, shall constitute a waiver of any of
         Lender's rights or of any of Grantor's obligations as to any future
         transactions. Whenever the consent of Lender is required under this
         Agreement, the granting of such consent by Lender in any instance shall
         not constitute continuing consent to subsequent instances where such
         consent is required and in all cases such consent may be granted or
         withheld in the sole discretion of Lender.

         NOTICES. Any notice required to be given under this Agreement shall be
         given in writing, and shall be effective when actually delivered, when
         actually received by telefacsimile (unless otherwise required by law),
         when deposited with a nationally recognized overnight courier, or, if
         mailed, when deposited in the United States mail, as first class,
         certified or registered mail postage prepaid, directed to the addresses
         shown near the beginning of this Agreement. Any party may change its
         address for notices under this Agreement by giving formal written
         notice to the other parties, specifying that the purpose of the notice
         is to change the party's address. For notice purposes, Grantor agrees
         to keep Lender informed at all times of Grantor's current address.
         Unless otherwise provided or required by law, if there is more than one
         Grantor, any notice given by Lender to any Grantor is deemed to be
         notice given to all Grantors.

         POWER OF ATTORNEY. Grantor hereby appoints Lender as Grantor's
         irrevocable attorney-in-fact for the purpose of executing any documents
         necessary to perfect, amend, or to continue the security interest
         granted in this Agreement or to demand termination of filings of other
         secured parties. Lender may at any time, and without further
         authorization from Grantor, file a carbon, photographic or other
         reproduction of any financing statement or of this Agreement for use as
         a financing statement. Grantor will reimburse Lender for all expenses
         for the perfection and the continuation of the perfection of Lender's
         security interest in the Collateral.

         SEVERABILITY. If a court of competent jurisdiction finds any provision
         of this Agreement to be illegal, invalid, or unenforceable as to any
         person or circumstances, that finding shall not make the offending
         provision illegal, invalid, or unenforceable as to any other person or
         circumstance. If feasible, the offending provision shall be considered
         modified so that it becomes legal, valid and enforceable. It the
         offending provision cannot be so modified, it shall be considered
         deleted from this Agreement. Unless otherwise required by law, the
         illegality, invalidity, or unenforceability of any provision of this

                                       11

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                           PAGE 12

         Agreement shall not affect the legality, validity or enforceability of
         any other provision of this Agreement.

         SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this
         Agreement on transfer of Grantor's interest, this Agreement shall be
         binding upon and inure to the benefit of the parties, their successors
         and assigns. If ownership of the Collateral becomes vested in a person
         other than Grantor, Lender, without notice to Grantor, may deal with
         Grantor's successors with reference to this Agreement and the
         Indebtedness by way of forbearance or extension without releasing
         Grantor from the obligations of this Agreement or liability under the
         Indebtedness.

         SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
         warranties, and agreements made by Grantor in this Agreement shall
         survive the execution and delivery of this Agreement, shall be
         continuing in nature, and shall remain in full force and effect until
         such time as Grantor's Indebtedness shall be paid in full.

         TIME IS OF THE ESSENCE. Time is of the essence in the performance of
         this Agreement.

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code:

         ACCOUNT. The word "Accounts" means a trade account, account receivable,
         other receivable, or other right to payment for goods sold or services
         rendered owing to Grantor (or to a third party grantor acceptable to
         Lender).

         AGREEMENT. The word "Agreement" means this Commercial Security
         Agreement, as this Commercial Security Agreement may be amended or
         modified (from time to time, together with all exhibits and schedules
         attached to this Commercial Security Agreement from time to time.

         BORROWER. The word "Borrower" means North & South Aspen, LLC; and Sardy
         House, LLC, and all other persons and entities signing the Note in
         whatever capacity.

         COLLATERAL. The word "Collateral" means all of Grantor's right, title
         and interest in and to all the Collateral as described in the
         Collateral Description section of this Agreement.

         DEFAULT. The word "Default" means the Default set forth in this
         Agreement in the Section titled "Default".

         ENVIRONMENTAL LAWS. The words "Environmental Laws" mean any and all
         state, federal and local statutes, regulations and ordinances relating
         to the protection of human health or the environment, including without
         limitation the Comprehensive Environmental Response, Compensation, and
         Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
         ("CERCLA"), the Superfund Amendments

                                       12

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                           PAGE 13

         and Reauthorization Act of 1988. Pub. L. No. 99499 ("SARA"). the
         Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
         seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section
         6901, et seq., or other applicable state or federal laws, rules, or
         regulations adopted pursuant thereto.

         EVENT OF DEFAULT. The words "Event of Default" mean any of the events
         of default set forth in this Agreement in the default section of this
         Agreement.

         GRANTOR. The word "Grantor" means North & South Aspen, LLC; and Sardy
         House, LLC.

         GUARANTOR. The word "Guarantor" means any guarantor, surety, or
         accommodation party of any or all of the Indebtedness.

         GUARANTY. The word "Guaranty" means the guaranty from Guarantor to
         Lender, including without limitation a guaranty of all or part of the
         Note.

         HAZARDOUS SUBSTANCES. The words "Hazardous Substances" mean materials
         that, because of their quantity, concentration or physical, chemical or
         infectious characteristics, may cause or pose a present or potential
         hazard to human health or the environment when improperly used,
         treated, stored, disposed of, generated, manufactured, transported or
         otherwise handled. The words "Hazardous Substances" are used in their
         very broadest sense and include without limitation any and all
         hazardous or toxic substances, materials or waste as defined by or
         listed under the Environmental Laws. The term "Hazardous Substances"
         also includes, without limitation, petroleum and petroleum by-products
         or any fraction thereof and asbestos.

         INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced
         by the Note or Related Documents, including all principal and interest
         together with all other indebtedness and costs and expenses for which
         Grantor is responsible under this Agreement or under any of the Related
         Documents.

         LENDER. The word "Lender" means WestStar Bank, its successors and
         assigns.

         NOTE. The word Note means the Note executed by North & South Aspen,
         LLC; and Sardy House, LLC in the principal amount of $4,000,000.00
         dated March 28, 2003, together with all renewals of. extensions of,
         modifications of, refinancings of, consolidations of, and substitutions
         for the note or credit agreement.

         PROPERTY. The word "Property" means all of Grantor's right, title and
         interest in and to all the Property as described in the "Collateral
         Description" section of this Agreement.

         RELATED DOCUMENTS. The words "Related Documents" mean oil promissory
         notes, credit agreements, loan agreements, environmental agreements,
         guaranties, security agreements. mortgages, deeds of trust, security
         deeds, collateral mortgages, and all other instruments, agreements and
         documents, whether now or hereafter existing, executed in connection
         with the Indebtedness.

                                       13

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT
LOAN NO. 55032                     (CONTINUED)                           PAGE 14

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED MARCH 28, 2003.

GRANTOR:

NORTH & SOUTH ASPEN, LLC

<TABLE>
<S>                                                                      <C>
By:      /S/ DANIEL D. DELANO                                            By:      /S/ FRANK S. PETERS
     ------------------------------------------------                         ------------------------------------------------
        Daniel D. Delano, Manager of                                             Frank S. Peters, Manager of
        North & South Aspen, LLC                                                 North & South Aspen, LLC

SARDY HOUSE, LLC

BLOCK 66, LLC Manager of Sardy House, LLC

By:      /S/ DANIEL D. DELANO                                            By:      /S/ FRANK S. PETERS
     ------------------------------------------------                         ------------------------------------------------
        Daniel D. Delano, Manager of Block 66, LLC                               Frank S. Peters, Manager of Block 66, LLC
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}]]