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<br />Promissory Note
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<br />Date July 11, 2001 Date of comPletion-P~~H'-k:~c:>() 2-
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<br />1. FOR VALUE RECEIVED, The Tunnel Water Company ("BORROWER") promises to pay' the State' of Colorado
<br />Water Conservation Board ("STATE"), the principal sum of Two Million Eighty Thousand Dollars ($2,080,000)
<br />plus interest at the rate of four and three-tenths percent (4,3%) per annum for a term of thirty (30) years,
<br />pursuant to Loan Contract No. C150065 dated July 11, 2001 ("LOAN CONTRACT"),
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<br />2, Principal and interest shall be payable in equal installments of $124,706.21, with the first payment due and
<br />payable one year from the date that the State determines that the project is substantially complete, and annually
<br />thereafter until all principal, interest, and all late charges, if any, have been paid in full, All principal, interest, and
<br />late charges, if any, then remaining unpaid shall be due and payable 30 years thereafter.
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<br />3, Payments shall be made payable to the Colorado Water Conservation Board and mailed to 1313 Sherman
<br />Street, Room 721, Denver, Colorado 80203.
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<br />4. If the STATE does not receive the annual payment within 15 calendar days of the due date, the State may
<br />impose a late charge in the amount of 5% of the annual payment.
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<br />5. This Note may be prepaid in whole or in part at any time without premium or penalty. Any partial prepayment
<br />shall not postpone the due date of any subsequent payments or change the amount of such payments,
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<br />6. All payments received shall be applied first to late charges, if any, next to accrued interest and then to reduce
<br />the principal amount.
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<br />7, This Note is issued pursuant to the LOAN CONTRACT between the STATE and the BORROWER. The LOAN
<br />CONTRACT creates security interests in favor of the STATE to secure the prompt payment of all amounts that
<br />may become due hereunder, The security interests, evidenced by a Security Agreement and a Deed of Trust,
<br />dated July 11, 2001, cover certain revenues and real property of the BORROWER. The LOAN CONTRACT, Security
<br />Agreement and Deed of Trust grant additional rights to the STATE, including the right to accelerate the maturity
<br />of this Note in certain events.
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<br />8. if any annual payment is not paid when due or any default under the LOAN CONTRACT or the Security Agreement
<br />or Deed of Trust or Assignment securing this Note occurs, the STATE may declare the entire outstanding
<br />principal balance of the Note, all accrued interest, and any outstanding late charges immediately due and
<br />payable, and the indebtedness shall bear interest at the rate of 7% per annum from the date of default. The
<br />STATE shall give the BORROWER written notice of any alleged default and an opportunity to cure within thirty
<br />(30) days of receipt of such notice before the BORROWER shall be considered in default for purposes of this
<br />Promissory Note,
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<br />9. The BORROWER, any guarantor, and any other person who is now or may hereafter become primarily or
<br />secondarily liable for the payment of this Note or any portion thereof hereby agree that if this Note or interest
<br />thereon is not paid when due or if suit is brought, then it shall pay all reasonable costs of collection, including
<br />reasonable attorney fees, In the event of any bankruptcy or similar proceedings, costs of collection shall include
<br />all costs and attorney fees incurred in connection with such proceedings, including the fees of counsel for
<br />attendance at meetings of creditors' committees or other committees,
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<br />10, This Note shall be governed in all respects by the laws of the State of Colorado,
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<br />BORROWER: The Tunnel Water Company, a Colorado
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<br />( SEA L ) nonl(!~t-"ypo~ati~n () '.
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<br />BY~ ~du-
<br />Fred Walker, President
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<br />
<br />~.
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<br />
<br />By
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<br />Appendix 2 to Loan Contract C150065
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