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<br />Date: August 1, 2003 <br /> <br />Promissory Note <br /> <br />Date of Substantial Completion --ac.e.m. bel- I , ::z 003 <br /> <br />1. For Value Received, the Windsor Reservoir and Canal Company ("BORROWER") promises <br />to pay the State of Colorado Water Conservation Board ("CWCB"), the principal sum of <br />$2,658,500 plus interest at the rate of four percent (4%) per annum for a term of 30 years, <br />pursuant to Loan Contract No. C153725 dated October 23, 1996, and amended April 1, <br />2001 and August 1, 2003 ("LOAN CONTRACT"). <br /> <br />2. This Promissory Note replaces and supersedes the Promissory Note dated April 1, 2001, in <br />the principal amount of $2,357,000. <br /> <br />3. The first payment of $153,741.32 shall be due one year from the date that the CWCB <br />determines that the project is substantially complete, and annually thereafter until the entire <br />principal sum, all accrued interest, and all late charges, if any, shall have been paid in full, <br /> <br />4. Payments shall be made payable to the Colorado Water Conservation Board and mailed to <br />1313 Sherman Street, Room 721, Denver, Colorado 80203. <br /> <br />5. If the CWCB does not receive the annual payment within 15 calendar days of the due date, <br />the CWCB may impose a late charge in the amount of 5% of the annual payment. <br /> <br />6. This Note may be prepaid in whole or in part at any time without premium or penalty. Any <br />partial prepayment shall not postpone the due date of any subsequent payments or change <br />the amount of such payments. . <br /> <br />7. All payments received shall be applied first to late charges, if any, next to accrued interest <br />and then to reduce the principal amount. <br /> <br />8. This Note is issued pursuant to the LOAN CONTRACT between the CWCB and the <br />BORROWER. The LOAN CONTRACT creates security interests in favor of the CWCB to secure <br />the prompt payment of all amounts that may become due hereunder. The security <br />interests, evidenced by a Security Agreement and a Deed of Trust dated October 23, 1996 <br />and amended April 1, 2001 and August 1, 2003, cover certain revenues, real property and <br />water rights of the BORROWER. The LOAN CONTRACT, Security Agreement and Deed of Trust <br />grant additional rights to the CWCB, including the right to accelerate the maturity of this <br />Note in certain events. <br /> <br />9. If any annual payment is not paid when due or any default under the LOAN CONTRACT, the <br />Security Agreement or Deed of Trust securing this Note occurs, the CWCB may declare the <br />entire outstanding principal balance of the Note, all accrued interest, and any outstanding <br />late charges immediately due and payable, without notice or demand, and the indebtedness <br />shall bear interest at the rate of 7% per annum from the date of default. The CWCB shall <br />give the BORROWER written notice of any alleged default and an opportunity to cure within <br />thirty (30) days of receipt of such notice before the BORROWER shall be considered in <br />default for purposes of this Promissory Note. <br /> <br />10. The BORROWER, any guarantor, and any other person who is now or may hereafter become <br />primarily or secondarily liable for the payment of this Note or any portion thereof hereby <br />agree that if this Note or interest thereon is not paid when due or suit is brought, then it shi:t11 <br /> <br />Appendix B to Contract C153725 Amendment No.2 <br />