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Promissory Note <br />Date IZWI , 2000 Date of Completion_ din &i4r. lT, dQ <br />1. For Value Received, the Ute Water Activity Enterprise ( "BORROWER ") promises to pay the State of Colorado <br />Water Conservation Board ( "STATE "), the principal sum of $7,000,000 plus interest at the rate of 4.75% percent per <br />annum for a term of thirty (30) years, pursuant to Loan Contract No. C150026 ( "LOAN CONTRACT "). <br />2. The first payment of $442,466.18 shall be due on July 1 following the date that the State determines that the project <br />is substantially complete, and annually thereafter until the entire principal sum, all accrued interest, and all late <br />charges, if any, shall have been paid in full. <br />3. Payments shall be made payable to the Colorado Water Conservation Board and mailed to 1313 Sherman Street, <br />Room 721, Denver, Colorado 80203. <br />4. If the STATE does not receive the annual payment within 15 calendar days of the due date, the State may impose a <br />late charge in the amount of 5% of the annual payment. <br />5. This Note may be prepaid in whole or in part at any time without premium or penalty. Any partial prepayment shall <br />not postpone the due date of any subsequent payments or changelhe amount of such payments. <br />6. All payments received shall be applied first to late charges,,if any; nett to accrued interest and then to reduce the <br />principal amount. <br />7. This Note is issued pursuant to the LOAN CONTRACT between the- !9iA7E'6nd'the BORROWER. The LOAN CONTRACT <br />creates security interests in favor of the STATE to secure the prompt pad ment of all amounts that may become due <br />hereunder. The security interests, evidenced by a Security Agreement, cover certain revenues and accounts of <br />the BORROWER. The LOAN CONTRACT and the Security Agreement grant additional rights to the STATE, including <br />the right to accelerate the maturity of this Note in certain events. <br />8. If any annual payment is not paid when due or any default under the LOAN CONTRACT or the Security Agreement <br />securing this Note occurs, the STATE may declare the entire outstanding principal balance of the Note, all accrued <br />interest, and any outstanding late charges immediately due and payable, and the indebtedness shall bear interest <br />at the rate of 7% per annum from the date of default. The STATE shall give the BORROWER written notice of any <br />alleged default and an opportunity to cure within thirty (30) days of receipt of such notice before the BORROWER <br />shall be considered in default for purposes of this Promissory Note. <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 all <br />costs and attorney fees incurred in connection with such proceedings, including the fees of counsel for attendance <br />at meetings of creditors' committees or other committees. <br />10. This Note shall be governed in all respects by the laws of the State of Colorado. <br />BORROWER: Ute ater Activity Enterprise <br />(SEAL) <br />By <br />Robert Elsberry, President <br />Attest: <br />By <br />J que Sta ord, Se e <br />Appendix B to Loan Contract C150026 <br />