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APPENDIX 2 <br /> PROMISSORY NOTE <br /> Date: June 4, 2014 <br /> Borrower: Lake Durango Water Authority, a Water Authority pursuant to <br /> C.R.S. §29-1-204.2 <br /> Principal Amount: $2,525,000 <br /> Interest Rate: 4.00% per annum <br /> Term of Repayment: 30 years <br /> Loan CONTRACT No.: C150317 <br /> Loan Payment: $146,021.00 <br /> Payment Initiation Date*: <br /> Maturity Date*: <br /> * Payment Initiation Date and Maturity Date fields are filled in after the project has been <br /> substantially completed. <br /> 1. FOR VALUE RECEIVED, the BORROWER promises to pay the Colorado Water Conservation <br /> Board ("CWCB"), the Principal Amount plus Interest for the Term of Repayment, pursuant to <br /> the LOAN CONTRACT and this PROMISSORY NOTE. Notwithstanding anything herein or in the <br /> LOAN CONTRACT to the contrary, all amounts payable under this PROMISSORY NOTE or the <br /> LOAN CONTRACT shall be payable only from the "NET REVENUE" (as defined in the LOAN <br /> RESOLUTION of the BORROWER authorizing the same). <br /> 2. Principal and interest shall be payable in equal loan payments, with the first payment due and <br /> payable one year from Payment Initiation Date (the date the CWCB determines that the <br /> project is substantially complete), and annually thereafter. All principal, interest, and late <br /> charges, if any, then remaining unpaid shall be due and payable on or before the Maturity <br /> Date. <br /> 3. Payments shall be made to the Colorado Water Conservation Board at 1313 Sherman Street, <br /> Room 721, Denver, Colorado 80203. <br /> 4. The CWCB may impose a late charge in the amount of 5% of the annual payment if the <br /> CWCB does not receive the annual payment within 15 calendar days of the due date. <br /> 5. This PROMISSORY NOTE may be prepaid in whole or in part at any time without premium or <br /> penalty. Any partial prepayment shall not postpone the due date of any subsequent payments <br /> or change the amount of such payments. <br /> 6. All payments received shall be applied first to late charges, if any, next to accrued interest and <br /> then to reduce the principal amount. <br /> 7. This PROMISSORY NOTE is issued pursuant to the LOAN CONTRACT between the CWCB and <br /> the BORROWER. The LOAN CONTRACT creates security interests in favor of the CWCB to <br /> secure the prompt payment of all amounts that may become due hereunder. Said security <br /> interests are evidenced by a SECURITY AGREEMENT, ("SECURITY INSTRUMENT") of even date <br /> and amount and cover certain revenues and/or accounts of the BORROWER. The LOAN <br /> Page 1 of 2 <br />