exv10w19



 





Exhibit 10.19








	 	 	 	 	 	 	 	 	 
	LOAN NUMBER 

0430011702

	 	LOAN NAME

Eldorado Artesian

Springs, Inc.
	 	ACCT. NUMBER

300117
	 	NOTE DATE

10/11/07
	 	INITIALS

RA
	NOTE AMOUNT
$3,000,000.00

	 	INDEX (w/Margin)

Not Applicable

	 	RATE

7.500%

Creditor Use Only
	 	MATURITY DATE

10/11/12
	 	 LOAN PURPOSE

Commercial








PROMISSORY NOTE

(Commercial — Single Advance)




 




DATE AND PARTIES. The date of this Promissory Note (Note) is October 11, 2007. The parties and
their addresses are:




     LENDER:


AMERICAN NATIONAL BANK

1360 Walnut Street, Suite 100

Boulder, Colorado 80302

Telephone: (3031 394-5100




     BORROWER:


ELDORADO ARTESIAN SPRINGS, INC.

a Colorado Corporation

1783 Dogwood Street

Louisville, Colorado 80027



DOUGLAS A. LARSON

31 Fowler Lane

Eldorado Springs, Colorado 80025



JEREMY S. MARTIN

2707 4th Street

Boulder, Colorado 80304



KEVIN M. SIPPLE

12 Baldwin Circle

Eldorado Springs, Colorado 80025



1 DEFINITIONS. As used in this Note, the terms have the following meanings:





A. Pronouns. The pronouns “I,” “me,” and “my” refer to each Borrower signing this Note,
individually and together. “You” and “Your” refer to the Lender.




B. Note. Note refers to this document, and any extensions, renewals, modifications and
substitutions of this Note.




C. Loan. Loan refers to this transaction generally, including obligations and duties arising
from the terms of all documents prepared or submitted for this transaction such as
applications, security agreements, disclosures or notes, and this Note.




D. Loan Documents. Loan Documents refer to all the documents executed as a part of or in
connection with the Loan.




E. Property. Property is any property, real, personal or intangible, that secures my
performance of the obligations of this Loan.




F. Percent. Rates and rate change limitations are expressed as annualized percentages.


2. PROMISE TO PAY. For value received, I promise to pay you or your order, at your address, or at
such other location as you may designate, the principal sum of $3,000,000.00 (Principal) plus
interest from October 11, 2007 on the unpaid Principal balance until this Note matures or this
obligation is accelerated.



3. INTEREST. Interest will accrue on the unpaid Principal balance of this Note at the rate of 7.500
percent (Interest Rate).





A. Interest After Default. If you declare a default under the terms of the Loan, including for
failure to pay in full at maturity, you may increase the Interest Rate otherwise payable as
described in this section. In such event, interest will accrue on the unpaid Principal balance
of this Note at 21.000 percent until paid in full.




B. Maximum Interest Amount. Any amount assessed or collected as interest under the terms of
this Note will be limited to the maximum lawful amount of interest allowed by state or federal
law, whichever is greater. Amounts collected in excess of the maximum lawful amount will be
applied first to the unpaid Principal balance. Any remainder will be refunded to me.




C. Statutory Authority. The amount assessed or collected on this Note is authorized by the
Colorado usury laws under Colo. Rev. Stat. § 5-12-103.




D. Accrual. Interest accrues using an Actual/360 days counting method.


4. ADDITIONAL CHARGES. As additional consideration, I agree to pay, or have paid, the fees and
charges listed on the APPENDIX: FEES AND CHARGES, which is attached to and made part of this
Note,



5. GOVERNING AGREEMENT. This Note is further governed by the Commercial Loan Agreement executed
between you and me as a part of this Loan, as modified, amended or supplemented. The Commercial
Loan Agreement states the terms and conditions of this Note, including the terms and conditions
under which the maturity of this Note may be accelerated. When I sign this Note, I represent to
you that I have reviewed and am in compliance with the terms contained in the Commercial Loan
Agreement.



6. PAYMENT. I agree to pay this Note in 60 payments. This Note is amortized over 300 payments. I
will make 59 payments of $22,385.35 beginning on November 11, 2007, and on the 11th day of each
month thereafter. A single “balloon payment” of the entire unpaid balance of Principal and
interest will be due October 11, 2012.



Payments will be rounded to the nearest 5.01. With the final payment I also agree to pay any
additional fees or charges owing and the amount of any advances you have made to others on my
behalf. Payments scheduled to be paid on the 29th, 30th or 31st day of a month that contains no
such day will, instead, be made on the last day of such month.




 









 







Each payment I make on this Note will be applied first to interest that is due then to principal
that is due, and finally to any charges that I owe other than principal and interest. If you and
I agree to a different application of payments, we will describe our agreement on this Note. You
may change how payments are applied in your sole discretion without notice to me. The actual
amount of my final payment will depend on my payment record.



7. PREPAYMENT. I may prepay this Loan in full or in part at any time. Any partial prepayment
will not excuse any later scheduled payments until I pay in full.



8. LOAN PURPOSE. The purpose of this Loan is to refinance commercial building and purchase new
equipment.



9. ADDITIONAL TERMS. IMPROVED REAL ESTATE: If this note is secured by improved real property,
and should the real property at any time become located in an area designated by the Director of
the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain
and maintain Federal Flood Insurance for the full unpaid principal balance of the loan and any
prior liens on the property securing the loan, up to the maximum policy limits set under the
National Flood Insurance Program, or as otherwise required by Lender, and to maintain such
insurance for the term of the loan.



10. SECURITY. The Loan is secured by separate security instruments prepared together with this
Note as follows:




	 	 	 
	Document Name

	 	Parties to Document
	Leases And Rents Assignment — 1783
Dogwood Street

	 	Eldorado Artesian Springs, Inc.
	Security Agreement — Eldorado Artesian
Springs, Inc.

	 	Eldorado Artesian Springs, Inc.
	Deed Of Trust — 1783 Dogwood Street

	 	Eldorado Artesian Springs, Inc.





11. DUE ON SALE OR ENCUMBRANCE. You may, at your option, declare the entire balance of this Note
to be immediately due and payable upon the creation of, or contract for the creation of, any
lien, encumbrance, transfer or sale of all or any part of the Property. This right is subject to
the restrictions imposed by federal law (12 C.F.R. 5911, as applicable.



12. WAIVERS AND CONSENT. To the extent not prohibited by law, I waive protest, presentment for
payment, demand, notice of acceleration, notice of intent to accelerate and notice of dishonor.





A. Additional Waivers By Borrower. In addition, I, and any party to this Note and Loan, to the
extent permitted by law, consent to certain actions you may take, and generally waive defenses
that may be available based on these actions or based on the status of a party to this Note,




(1) You may renew or extend payments on this Note, regardless of the number of such
renewals or extensions.




(21 You may release any Borrower, endorser, guarantor, surety, accommodation maker or any
other co-signer.




(3) You may release, substitute or impair any Property securing this Note.




(4) You, or any institution participating in this Note, may invoke your right of set-off.




151 You may enter into any sales, repurchases or participations of this Note to any person
in any amounts and I waive notice of such sales, repurchases or participations.




(6) I agree that any of us signing this Note as a Borrower is authorized to modify the
terms of this Note or any instrument securing, guarantying or relating to this Note.




B. No Waiver By Lender. Your course of dealing, or your forbearance from, or delay in, the
exercise of any of your rights, remedies, privileges or right to insist upon my strict
performance of any provisions contained in this Note, or any other Loan Document, shall not
be construed as a waiver by you, unless any such waiver is in writing and is signed by you.


13. COMMISSIONS. I understand and agree that you (or your affiliate) will earn commissions or
fees on any insurance products, and may earn such fees on other services that I buy through you
or your affiliate.



14. APPLICABLE LAW. This Note is governed by the laws of Colorado, the United States of America,
and to the extent required, by the laws of the jurisdiction where the Property is located,
except to the extent such state laws are preempted by federal law.



15. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay the Loan is independent
of the obligation of any other person who has also agreed to pay it. You may sue me alone, or
anyone else who is obligated on the Loan, or any number of us together, to collect the Loan.
Extending the Loan or new obligations under the Loan, will not affect my duty under the Loan and
I will still be obligated to pay the Loan. This Note shall inure to the benefit of and be
enforceable by you and your successors and assigns and shall be binding upon and enforceable
against me and my personal representatives, successors, heirs and assigns.



16. AMENDMENT, INTEGRATION AND SEVERABILITY. This Note may not be amended or modified by oral
agreement. No amendment or modification of this Note is effective unless made in writing and
executed by you and me. This Note and the other Loan Documents are the complete and final
expression of the agreement. If any provision of this Note is unenforceable, then the
unenforceable provision will be severed and the remaining provisions will still be enforceable.



17. INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the
singular. The section headings are for convenience only and are not to be used to interpret or
define the terms of this Note.



18. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any
notice will be given by delivering it or mailing it by first class mail to the appropriate
party’s address listed in the DATE AND PARTIES section, or to any other address designated in
writing. Notice to one Borrower will be deemed to be notice to all Borrowers. I will inform you
in writing of any change in my name, address or other application information. I agree to sign,
deliver, and file any additional documents or certifications that you may consider necessary to
perfect, continue, and preserve my obligations under this Loan and to confirm your lien status
on any Property. Time is of the essence.



19. CREDIT INFORMATION. I agree to supply you with whatever information you reasonably request.
You will make requests for this information without undue frequency, and will give me reasonable
time in which to supply the information.



20. ERRORS AND OMISSIONS. I agree, if requested by you, to fully cooperate in the correction, if
necessary, in the reasonable discretion of you of any and all loan closing documents so that all
documents accurately describe the loan between you and me. I agree to assume all costs including
by way of illustration and not limitation, actual expenses, legal fees and marketing losses for
failing to reasonably comply with your requests within thirty (30) days.



21. SIGNATURES. By signing, I agree to the terms contained in this Note. I also acknowledge
receipt of a copy of this Note.




 









 








	 	 	 	 	 
	BORROWER:



Eldorado Artesian Springs, Inc.

 	 	 
	By  	
 	 	 
	 	Douglas A. Larson, President 	 	 
	 	 	 	 
	 
	By  	
 	 	 
	 	Kevin M. Sipple, Vice President 	 	 
	 	 	 	 
	 
	By  	
 	 	 
	 	Jeremy S. Martin, Vice President 	 	 
	 	 	 	 
	 
	
 	 	 
	Douglas A. Larson Individually 	 	 
	 
	
 	 	 
	Jeremy S. Martin Individually 	 	 
	 
	       Kevin M. Sipple
 	 	 
	Individually 	 	 
	 
	LENDER:



American National Bank

 	 	 
	By  	 	 	 
	 	Roger Ayan, Market President 	 	 
	 



APPENDIX: FEES AND CHARGES



As described in the ADDITIONAL CHARGES section of the attached Note,
I agree to pay, or have paid, these additional fees and charges.



Nonrefundable Fees and Charges. The following fees are earned when
collected and will not be refunded if I prepay this Note before the
scheduled maturity date.






Title Insurance. Ain) Title Insurance fee of $6,639.00 payable from separate funds on or before
today’s date.
Recording — Assignments of Rents. Aln) Recording — Assignments of
Rents fee of $36.00 payable from separate funds on or before
today’s date.




Recording — Releases. AM) Recording — Releases fee of $21.00
payable from separate funds on or before today’s date. Recording
 — Mortgage. AIM Recording — Mortgage fee of $36.00 payable from
separate funds on or before today’s date. Non-RE Filing. Aln)
Non-RE Filing fee of 516.00 payable from separate funds on or
before today’s date. Loan Origination. AM) Loan Origination fee
of $6,000.00 payable from separate funds on or before today’s
date. Legal Review. A(n) Legal Review fee of $300.00 payable from
separate funds on or before today’s date, Flood Determination.
AM) Flood Determination fee of $13,00 payable from separate funds
on or before today’s date. Enviromental Report. AM) Enviromental
Report fee of $275.00 payable from separate funds on or before
today’s date. Appraisal Review. Aln) Appraisal Review fee of
$525.00 payable from separate funds on or before today’s date.
Appraisal. Ain) Appraisal fee of $4,000.00 payable from separate
funds on or before today’s date.



 









 





	 	 	 	 	 	 	 	 	 
	 
	LOAN NUMBER

0430011702



NOTE AMOUNT

$3,000,000.00

	 	LOAN NAME

Eldorado Artesian

Springs, Inc.

INDEX (w/Margin)

Not Applicable

	 	ACCT. NUMBER

300117



RATE

7.500%

Creditor Use Only
	 	AGREEMENT DATE

10/11/07



MATURITY DATE

10/11/12
	 	INITIALS

RA



LOAN PURPOSE

Commercial
	 





COMMERCIAL LOAN AGREEMENT

Single Advance Loan




 




DATE AND PARTIES. The date of this Commercial Loan Agreement
(Agreement) is October 11, 2007. The parties and their addresses
are as follows:




     LENDER:


AMERICAN NATIONAL BANK

1360 Walnut Street, Suite 100

Boulder, Colorado 80302




     BORROWER:


ELDORADO ARTESIAN SPRINGS, INC.

a Colorado Corporation

1783 Dogwood Street

Louisville, Colorado 80027



DOUGLAS A. LARSON

31 Fowler Lane

Eldorado Springs, Colorado 80025



JEREMY S. MARTIN

2707 4th Street

Boulder, Colorado 80304



KEVIN M. SIPPLE

12 Baldwin Circle

Eldorado Springs, Colorado 80025



1. DEFINITIONS. For the purposes of this Agreement, the following terms have the following
meanings.





A. Accounting Terms. In this Agreement, any accounting terms
that are not specifically defined will have their customary
meanings under generally accepted accounting principles.




B. Insiders. Insiders include those defined as insiders by the
United States Bankruptcy Code, as amended; or to the extent left
undefined, include without limitation any officer, employee,
stockholder or member, director, partner, or any immediate
family member of any of the foregoing, or any person or entity
which, directly or indirectly, controls, is controlled by or is
under common control with me.




C. Loan. The Loan refers to this transaction generally,
including obligations and duties arising from the terms of all
documents prepared or submitted for this transaction.




D. Loan Documents. Loan Documents refer to all the documents executed as a part of or in
connection with the Loan.


E. Pronouns. The pronouns “I”, “me” and “my” refer to every
Borrower signing this Agreement, individually or together. “You”
and “your” refers to the Loan’s lender.




F. Property. Property is any property, real, personal or
intangible, that secures my performance of the obligations of
this Loan.


2. SINGLE ADVANCE. In accordance with the terms of this Agreement
and other Loan Documents, you will provide me with a term note in
the amount of $3,000,000.00 (Principal). I will receive the funds
from this Loan in one advance. No additional advances are
contemplated, except those made to protect and preserve your
interests as provided in this Agreement or other Loan Documents,



3. MATURITY DATE. I agree to fully repay the Loan by October 11, 2012.



4. WARRANTIES AND REPRESENTATIONS. I make to you the following
warranties and representations which will continue as long as this
Loan is in effect, except when this Agreement provides otherwise.





A. Power. I am duly organized, and validly existing and in good
standing in all jurisdictions in which I operate. I have the
power and authority to enter into this transaction and to carry
on my business or activity as it is now being conducted and, as
applicable, am qualified to do so in each jurisdiction in which
I operate.




B. Authority. The execution, delivery and performance of this
Loan and the obligation evidenced by the Note are within my
powers, have been duly authorized, have received all necessary
governmental approval, will not violate any provision of law, or
order of court or governmental agency, and will not violate any
agreement to which I am a party or to which I am or any of my
property is subject.




C. Name and Place of Business. Other than previously disclosed
in writing to you I have not changed my name or principal place
of business within the last 10 years and have not used any other
trade or fictitious name. Without your prior written consent, I
do not and will not use any other name and will preserve my
existing name, trade names and franchises.




D. Hazardous Substances. Except as I previously disclosed in
writing and you acknowledge in writing, no Hazardous Substance,
underground tanks, private dumps or open wells are currently
located at, on, in, under or about the Property.




E. Use of Property. After diligent inquiry, I do not know or
have reason to know that
any Hazardous




 











 






Substance has been discharged, leached or disposed of, in
violation of any Environmental Law, from the property onto, over
or into any other property, or from any other property onto,
over or into the property.




F. Environmental Laws. I have no knowledge or reason to believe that there is
any pending or threatened investigation, claim, judgment or order, violation,
lien, or other notice under any Environmental Law that concerns me or the
property. The property and any activities on the property are in full
compliance with all Environmental Law.




G. Loan Purpose. The purpose of this Loan is to refinance commercial building and purchase new
equipment.




H. No Other Liens. I own or lease all property that I need to conduct my
business and activities. I have good and marketable title to all property
that I own or lease. All of my Property is free and clear of all liens,
security interests, encumbrances and other adverse claims and interests,
except those to you or those you consent to in writing.




I. Compliance With Laws. I am not violating any laws, regulations, rules,
orders, judgments or decrees applicable to me or my property, except for
those which I am challenging in good faith through proper proceedings after
providing adequate reserves to fully pay the claim and its challenge should I
lose.


5. FINANCIAL STATEMENTS. I will prepare and maintain my financial records using
consistently applied generally accepted accounting principles then in effect. I
will provide you with financial information in a form that you accept and under
the following terms.





A. Certification. I represent and warrant that any financial statements that
I provide you fairly represents my financial condition for the stated
periods, is current, complete, true and accurate in all material respects,
includes all of my direct or contingent liabilities and there has been no
material adverse change in my financial condition, operations or business
since the date the financial information was prepared.




B. Frequency. In addition to the financial statements provided to you prior
to closing, I will provide you with current financial statements on an annual
basis, or as otherwise requested by you, until I have performed all of my
obligations under the Loan and you terminate the Loan in writing.




C. Rent Roll and Vacancy Analysis Report. I will provide you with an annual
report concerning my rental real estate property, listing for each month: my
current tenants, the square footage each tenant rented, the rent each paid
and each lease’s expiration date as well as the square footage that remained
vacant,




D. Requested Information. I will provide you with any other information about
my operations, financial affairs and condition within see below or 30 days
after your request.




E. Additional Financial Statements Term.




111 Annual Audited Business Financial Statements: Borrower will provide
fiscal year end, audited business financial statements within 90-days of
fiscal year end.




121 Quarterly 10 — QSB Forms: Borrower will provide quarterly 10 — QSB forms, within 30 days
of filing due date.




(31 Annual Personal Financial Statements: Co-Makers will provide a financial
statement annually or within 30 days of written request.




(41 Annual Personal Tax Returns: Co-Makers will provide personal tax returns,
or valid extension, within 30 days of filing due date. If an extension is
received, the filed tax returns must be received within 30-days of expiration
of extension.


6. COVENANTS. Until the Loan and all related debts, liabilities and obligations
are paid and discharged, I will comply with the following terms, unless you
waive compliance in writing.





A. Participation. I consent to you participating or syndicating the Loan and
sharing any information that you decide is necessary about me and the Loan
with the other participants or syndicators.




B. Inspection. Following your written request, I will immediately pay for all
one-time and recurring out-of-pocket costs that are related to the inspection
of my records, business or Property that secures the Loan. Upon reasonable
notice, I will permit you or your agents to enter any of my premises and any
location where my Property is located during regular business hours to do the
following.




(11 You may inspect, audit, check, review and obtain copies from my books,
records, journals, orders, receipts, and any correspondence and other
business related data.




12) You may discuss my affairs, finances and business with any one who
provides you with evidence that they are a creditor of mine, the
sufficiency of which will be subject to your sole discretion.




(3) You may inspect my Property, audit for the use and disposition of the
Property’s proceeds and proceeds of proceeds; or do whatever you decide is
necessary to preserve and protect the Property and your interest in the
Property.




After prior notice to me, you may discuss my financial condition and business
operations with my independent accountants, if any, or my chief financial
officer and I may be present during these discussions. As long as the Loan is
outstanding, I will direct all of my accountants and auditors to permit you
to examine my records in their possession and to make copies of these
records. You will use your best efforts to maintain the confidentiality of
the information you or your agents obtain, except you may provide your
regulator, if any, with required information about my financial condition,
operation and business or that of my parent, subsidiaries or affiliates.




C. Business Requirements. I will preserve and maintain my present existence
and good standing in the jurisdiction where I am organized and all of my
rights, privileges and franchises. I will do all that is needed or required
to continue my business or activities as presently conducted, by obtaining
licenses, permits and bonds everywhere I engage in business or activities or
own, lease or locate my property. I will obtain your prior written consent
before I cease my business or before I engage in any new line of business
that is materially different from my present business.




D. Compliance with Laws. I will not violate any laws, regulations, rules,
orders, judgments or decrees applicable to me or my Property, except for
those which I challenge in good faith through proper proceedings after
providing adequate reserves to fully pay the claim and its appeal should I
lose. Laws include without limitation the Federal Fair Labor Standards Act
requirements for producing goods, the federal Employee Retirement Income
Security Act of 1974’s requirements for the establishment, funding and
management of qualified deferred compensation plans for employees, health and
safety laws, environmental laws, tax laws, licensing and permit laws. On your
request, I will provide you with written evidence that I have fully and
timely paid my taxes, assessments and other governmental charges levied or
imposed on me, my income or profits and my property. Taxes include without
limitation sales taxes, use taxes, personal property taxes, documentary stamp
taxes, recordation taxes, franchise taxes, income taxes, withholding taxes,
FICA taxes and unemployment taxes. I will adequately provide for the payment
of these taxes, assessments and other charges that have accrued but are not
yet due and payable.




E. New Organizations. I will obtain your written consent and any necessary
changes to the Loan Documents before I organize or participate in the
organization of any entity, merge into or consolidate with any one, permit
any one else to merge into me, acquire all or substantially all of the assets
of any one else or otherwise materially change my legal structure,
management, ownership or financial condition.




F. Other Liabilities. I will not incur, assume or permit any debt evidenced
by notes, bonds or similar obligations, except: debt in existence on the date
of this Agreement and fully disclosed to you; debt subordinated in payment to
you on



 









 






conditions and terms acceptable to you; accounts payable incurred in the ordinary course of my
business and paid under customary trade terms or contested in good faith with reserves
satisfactory to you.




G. Notice to You. I will promptly notify you of any material change in my financial condition, of
the occurrence of a default under the terms of this Agreement or any other Loan Document, or a
default by me under any agreement between me and any third party which materially and adversely
affects my property, operations, financial condition or business.




H. Dispose of No Assets. Without your prior written consent or as the Loan Documents permit, I
will not sell, lease, assign, transfer, dispose of or otherwise distribute all or substantially
all of my assets to any person other than in the ordinary course of business for the assets’
depreciated book value or more.




I. Insurance. I will obtain and maintain insurance with insurers, in amounts and coverages that
are acceptable to you and customary with industry practice. This may include without limitation
insurance policies for public liability, fire, hazard and extended risk, workers compensation,
and, at your request, business interruption and/or rent loss insurance. At your request, I will
deliver to you certified copies of all of these insurance policies, binders or certificates. I
will obtain and maintain a mortgagee or lender loss payee endorsement for you when these
endorsements are available. I will immediately notify you of cancellation or termination of
insurance. I will require all insurance policies to provide you with at least 10 days prior
written notice to you of cancellation or modification. I consent to you using or disclosing
information relative to any contract of insurance required by the Loan for the purpose of
replacing this insurance. I also authorize my insurer and you to exchange all relevant
information related to any contract of insurance required by any document executed as part of
this Loan.




J. Property Maintenance. I will keep all tangible and intangible property that I consider
necessary or useful in my business in good working condition by making all needed repairs,
replacements and improvements and by making all rental, lease or other payments due on this
property.




K. Property Loss. I will immediately notify you, and the insurance company when appropriate, of
any material casualty, loss or depreciation to the Property or to my other property that affects
my business.




L. Additional Taxes. I will pay all filing and recording costs and fees, including any
recordation, documentary or transfer taxes or stamps, that are required to be paid with respect
to this Loan and any Loan Documents.




M. Additional Covenants.




(1) Monthly Borrowing Base Certificate: Availability and borrowing will be controlled by a
borrowing base computed monthly consisting of accounts receivable and inventory. Borrowing may
not exceed the sum of 75% of the value of accounts receivable, which are less than or equal to 60
days and 50% of the inventory.




121 Current Ratio: Borrower will maintain a current ratio greater than 1.15:1, to be measured
quarterly.




131 Tangible Net Worth: Borrower will maintain minimum tangible net worth of $1,000,000 measured
annually upon receipt of fiscal year end 3/31 10-K financials. This covenant is to measure actual
net worth, less outstanding notes to shareholders and other intangibles.




14) Capital Expenditures: Borrower will not undertake any capital expenditures greater than
$300,000 in any given year without Bank’s written consent.




(5) Prepayment Penalties: The bank will impose a 2% prepayment penalty on the outstanding
principal balance of the subject note if repaid 1in-full) within the first year after origination
date. A 1% penalty will be required if repaid in-full between years 2, 3 or 4.




16) Invoices on new equipment purchases: Borrower will provide the bank with a copy of invoice on
any equipment purchases made using proceeds from the subject term facility in order to
substantiate funding.




17) Cross Collateralization: Net equipment will be cross-collateralized on both requests
presented here.




(8) Debt Service Coverage Ratio: Borrower will maintain an annual, minimum Debt Service Coverage
Ratio (DSCR) on owner occupied term note facility of 1.25:1.




I understand and agree that, notwithstanding anything else in this agreement to the contrary, you
may place customary tombstone or similar notices in publications that announce that you have made
this loan. Such announcements will generally include my name and the amount of the loan, and may
include my logo and the general purpose of the loan.




The word Loan or Loans means and includes without limitation all Loan or Loans, together with all
other obligations, debts and liabilities of Borrower to Lender, or any one or more of them, as
well as all claims by Lender against Borrower, or any one or more of them; whether now or
hereafter existing, voluntary or involuntary, due or not due, absolute or contingent, liquidated
or unliquidated; whether Borrower may be liable individually or jointly with others; whether
Borrower may be obligated as a guarantor, surety, or otherwise; whether recovery upon such Loan
or Loans may be or hereafter may become barred by any statute of limitations; and whether such
Loan or Loans may be or hereafter may become otherwise unenforceable. The word Loan or Loans also
means and includes without limitation any and all commercial loans and financial accommodations
from Lender to Borrower, whether now or hereafter existing, and however evidenced, including
without limitation those Loan or Loans and financial accommodations described herein or described
on any exhibit or schedule attached to this Agreement from time to time.


7. DEFAULT. I will be in default if any of the following occur:





A. Payments. I fail to make a payment in full when due.





B. Insolvency or Bankruptcy. The death, dissolution or insolvency of, appointment of a receiver
by or on behalf of, application of any debtor relief law, the assignment for the benefit of
creditors by or on behalf of, the voluntary or involuntary termination of existence by, or the
commencement of any proceeding under any present or future federal or state insolvency,
bankruptcy, reorganization, composition or debtor relief law by or against me or any co-signer,
endorser, surety or guarantor of this Agreement or any other obligations I have with you.




C. Death or Incompetency. I die or am declared legally incompetent.





D. Business Termination. I merge, dissolve, reorganize, end my business or existence, or a
partner or majority owner dies or is declared legally incompetent.




E. Failure to Perform. I fail to perform any condition or to keep any promise or covenant of this
Agreement.




F. Other Documents. A default occurs under the terms of any other Loan Document.




G. Other Agreements. I am in default on any other debt or agreement I have with you.





H. Misrepresentation. I make any verbal or written statement or provide any financial information
that is untrue, inaccurate, or conceals a material fact at the time it is made or provided.




I. Judgment. I fail to satisfy or appeal any judgment against me.




J. Forfeiture. The Property is used in a manner or for a purpose that threatens confiscation by a
legal authority.




K. Name Change. I change my name or assume an additional name without notifying you before making
such a change.




L. Property Transfer. I transfer all or a substantial part of my money or property.




M. Property Value. You determine in good faith that the value of the Property has declined or
is impaired.




N. Material Change. Without first notifying you, there is a
material change in my business, including ownership, management,
and financial conditions.




0. Insecurity. You determine in good faith that a material
adverse change has occurred in Borrower’s financial condition
from the conditions set forth in Borrower’s most recent
financial statement before the date of this Agreement or that
the prospect for payment or performance of the Loan is impaired
for any reason.


8. REMEDIES. After I default, you may at your option do any one or more of the following.





A. Acceleration. You may make all or any part of the amount
owing by the terms of the Loan immediately due. If I am a debtor
in a bankruptcy petition or in an application filed under
section 51a113) of the Securities Investor Protection Act, the
Loan is automatically accelerated and immediately due and
payable without notice or demand upon filing of the petition or
application.



 









 






B. Sources. You may use any and all remedies you have under state or federal law or in any Loan
Document.




C. Insurance Benefits. You may make a claim for any and all
insurance benefits or refunds that may be available on my
default.




D. Payments Made On My Behalf. Amounts advanced on my behalf
will be immediately due and may be added to the balance owing
under the terms of the Loan, and accrue interest at the highest
post-maturity interest rate.




E. Attachment. You may attach or garnish my wages or earnings.




F. Set-Off. You may use the right of set-off. This means you may
set-off any amount due and payable under the terms of the Loan
against any right I have to receive money from you.




My right to receive money from you includes any deposit or share
account balance I have with you; any money owed to me on an item
presented to you or in your possession for collection or
exchange; and any repurchase agreement or other non-deposit
obligation. “Any amount due and payable under the terms of the
Loan” means the total amount to which you are entitled to demand
payment under the terms of the Loan at the time you set-off.




Subject to any other written contract, if my right to receive
money from you is also owned by someone who has not agreed to
pay the Loan, your right of set-off will apply to my interest in
the obligation and to any other amounts I could withdraw on my
sole request or endorsement.




Your right of set-off does not apply to an account or other
obligation where my rights arise only in a representative
capacity. It also does not apply to any Individual Retirement
Account or other tax-deferred retirement account.




You will not be liable for the dishonor of any check when the
dishonor occurs because you set-off against any of my accounts.
I agree to hold you harmless from any such claims arising as a
result of your exercise of your right of set-off.




G. Waiver. Except as otherwise required by law, by choosing any
one or more of these remedies you do not give up your right to
use any other remedy. You do not waive a default if you choose
not to use a remedy. By electing not to use any remedy, you do
not waive your right to later consider the event a default and
to use any remedies if the default continues or occurs again.


9. COLLECTION EXPENSES AND ATTORNEYS’ FEES. On or after Default,
to the extent permitted by law, I agree to pay all expenses of
collection, enforcement or protection of your rights and remedies
under this Agreement or any other Loan Document. Expenses include,
but are not limited to, attorneys’ fees, court costs and other
legal expenses. These expenses are due and payable immediately. If
not paid immediately, these expenses will bear interest from the
date of payment until paid in full at the highest interest rate in
effect as provided for in the terms of this Loan. All fees and
expenses will be secured by the Property I have granted to you, if
any. In addition, to the extent permitted by the United States
Bankruptcy Code, I agree to pay the reasonable attorneys’ fees
incurred by you to protect your rights and interests in connection
with any bankruptcy proceedings initiated by or against me.



10. APPLICABLE LAW. This Agreement is governed by the laws of
Colorado, the United States of America, and to the extent
required, by the laws of the jurisdiction where the Property is
located, except to the extent such state laws are preempted by
federal law.



11. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation
to pay the Loan is independent of the obligation of any other
person who has also agreed to pay it. You may sue me alone, or
anyone else who is obligated on the Loan, or any number of us
together, to collect the Loan. Extending the Loan or new
obligations under the Loan, will not affect my duty under the Loan
and I will still be obligated to pay the Loan. You may assign all
or part of your rights or duties under this Agreement or the Loan
Documents without my consent. If you assign this Agreement, all of
my covenants, agreements, representations and warranties contained
in this Agreement or the Loan Documents will benefit your
successors and assigns. I may not assign this Agreement or any of
my rights under it without your prior written consent. The duties
of the Loan will bind my successors and assigns.



12. AMENDMENT, INTEGRATION AND SEVERABILITY. This Agreement may
not be amended or modified by oral agreement. No amendment or
modification ‘of this Agreement is effective unless made in
writing and executed by you and me. This Agreement and the other
Loan Documents are the complete and final expression of the
understanding between you and me. If any provision of this
Agreement is unenforceable, then the unenforceable provision will
be severed and the remaining provisions will still be enforceable.



13. INTERPRETATION. Whenever used, the singular includes the
plural and the plural includes the singular. The section headings
are for convenience only and are not to be used to interpret or
define the terms of this Agreement.



14. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless
otherwise required by law, any notice will be given by delivering
it or mailing it by first class mail to the appropriate party’s
address listed in the DATE AND PARTIES section, or to any other
address designated in writing. Notice to one Borrower will be
deemed to be notice to all Borrowers. I will inform you in writing
of any change in my name, address or other application
information. I will provide you any financial statement or
information you request. All financial statements and information
I give you will be correct and complete. I agree to sign, deliver,
and file any additional documents or certifications that you may
consider necessary to perfect, continue, and preserve my
obligations under this Loan and to confirm your lien status on any
Property. Time is of the essence.



15. SIGNATURES. By signing, I agree to the terms contained in this
Agreement. I also acknowledge receipt of a copy of this Agreement.




 









 








	 	 	 	 	 
	BORROWER:	 	 
	 
	 	 	 	 
	Eldorado Artesian Springs, Inc.	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	Douglas A. Larson,
President	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	Kevin M. Sipple,
Vice President	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	Jeremy S. Martin,
Vice President	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	Douglas A. Larson	 	 
	Individually	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	Jeremy S. Martin	 	 
	Individually	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	Kevin M. Sipple	 	 
	Individually	 	 
	 
	 	 	 	 
	LENDER:	 	 
	 
	 	 	 	 
	American National Bank	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 	 	 
	 

	 	Roger Ayan, Market President