C150065 Contract

• Contract/PO #: C150065
• Contractor Name: Tunnel Water Company, The
• Contract Type: Loan
• Water District: 3
• County: Larimer
• Bill Number: SB 01-157
• Loan Projects - Doc Type: Contract Documents

PROMISSORY NOTE

DATE: NOVEMBER 24, 2003

PRINCIPAL AMOUNT: 1,881,400.48

1. FOR VALUE RECEIVED, The Tunnel Water Company ("BORROWER") promises to
pay the State of Colorado Water Conservation Board ("STATE"), the principal
sum of One Million Eight Hundred Eighty One Thousand Four Hundred and
48/100 Dollars ($1,881,400.48) plus interest at the rate of four and three-tenths
percent (4.3%) per annum for a term of thirty (30) years, pursuant to Loan
Contract No. C150065 dated July 11, 2001 and amended November 24, 2003
("LOAN CONTRACT").

2. This Promissory Note replaces and supersedes the Promissory Note dated
July 11,2001, in the principal amount of $2,080,000.

3. Principal and interest shall be payable in equal installments of $112,799.20,
with the first payment due and payable on December 1, 2003 and annually
thereafter. All principal, interest, and late charges, if any, remaining unpaid at
the end of the30-year period commencing December 1, 2002, shall be due on
December 1,2032 and payable on or before December 1, 2032.

4. Payments shall be made payable to the Colorado Water Conservation Board
and mailed to 1313 Sherman Street, Room 721, Denver, Colorado 80203.

5. If the STATE does not receive the annual payment within 15 calendar days of
the due date, the State may impose a late charge in the amount of 5% of the
annual payment.

6. This Note may be prepaid in whole or in part at any time without premium or
penalty. Any partial prepayment shall not postpone the due date of any
subsequent payments or change the amount of such payments.

7. All payments received shall be applied first to late charges, if any, next to
accrued interest and then to reduce the principal amount.

8. This Note is issued pursuant to the LOAN CONTRACT between the STATE and the
BORROWER. The LOAN CONTRACT creates security interests in favor of the
STATE to secure the prompt payment of all amounts that may become due
hereunder. The security interests, evidenced by a Security Agreement, dated
July 11, 2001 and amended November 24, 2003,covers certain revenues and
a Deed of Trust, dated July 11, 2001 and amended November 24, 2003,
covers real property of the BORROWER. The LOAN CONTRACT, Security
Agreement and Deed of Trust grant additional rights to the STATE, including the
right to accelerate the maturity of this Note in certain events.

9. If any annual payment is not paid when due or any default under the LOAN
CONTRACT or the Security Agreement or Deed of Trust securing this Note

Appendix A to Loan Contract C150065 Amendment No.1