Document:

exv4w1

EXHIBIT 4.1

FORM OF FACE OF DEBENTURE

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR INDIVIDUAL SECURITIES REGISTERED IN THE NAMES OF PARTICIPANTS IN
DTC, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC OR BY A NOMINEE OF DTC TO DTC
OR A NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY.

			
	 	 	 
	No. ___	 	$                    

TIME WARNER CABLE INC.
6.75% Debenture due 2039

CUSIP: 88732JAU2

     Time Warner Cable Inc., a Delaware corporation (such corporation or any successor under the
Indenture referred to on the reverse hereof being called the “Company”), TW NY Cable Holding Inc.,
a Delaware corporation (“TW NY”), and Time Warner Entertainment Company, L.P., a Delaware limited
partnership (“TWE” and, together with TW NY, the “Guarantors”), promise to pay to Cede & Co., or
registered assigns, the principal sum of ______($______) on June 15, 2039, at the office or
agency of the Company in the Borough of Manhattan, the City and State of New York. This Debenture
has the benefit of unconditional guarantees by the Guarantors, as more fully described on the
reverse hereof.

			
	     Interest Payment Dates: Semi-annually in arrears on June 15 and December 15, beginning December 15, 2009

			
	     Record Dates: June 1 and December 1

     Additional provisions of this Debenture are set forth on the other side of this Debenture.

Dated:   June 29, 2009

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	TIME WARNER CABLE INC.,	 	 
	Attest:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Robert D. Marcus	 	 
	 

	 	 
	 	 	 	 	 	Title:
	 	Senior Executive Vice President
and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	TW NY CABLE HOLDING INC.,	 	 
	Attest:	 	 	 	as Guarantor,	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Robert D. Marcus	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	Senior Executive Vice President
and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	TIME WARNER ENTERTAINMENT COMPANY, L.P.,	 	 
	 	 	 	 	as Guarantor,	 	 
	Attest:
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	by	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Robert D. Marcus	 	 
	 

	 	 
	 	 	 	 	 	Title:
	 	Senior Executive Vice President
and Chief Financial Officer	 	 

 

 

TRUSTEE’S CERTIFICATE OF

     AUTHENTICATION

This is one of the Securities of the
series designated
therein referred to in the within-mentioned Indenture.

The Bank of New York Mellon, as Trustee,

	 	 	 	 	 	 	 
	 
	 	by	 	 	 	 
	 
	 	 
	 	 
	 
	 	 	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 
	 	Dated	 	 	 	 
	 
	 	 	 	 	 	 

 

 

FORM OF REVERSE SIDE OF DEBENTURE

TIME WARNER CABLE INC.

6.75% Debenture due 2039

     This Debenture (as defined below) is one of the duly authorized issue of senior debentures,
notes, bonds or other evidences of indebtedness (hereinafter called the “Debt Securities”) of the
Company of the series hereinafter specified, all issued or to be issued under and pursuant to the
Indenture, dated as of April 9, 2007, among the Company, TW NY, TWE, and The Bank of New York
Mellon, as Trustee (herein called the “Trustee”), as supplemented by the first supplemental
indenture, dated as of April 9, 2007, between the Company, TW NY, TWE and the Trustee and pursuant
to resolutions adopted by the Offering Committee of the Company on June 24, 2009, as authorized by
the Company’s Board of Directors (as so supplemented, the “Indenture”), to which reference is
hereby made for a statement of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, and any agent of the Trustee, any Paying Agent, the Company,
the Guarantors and the Holders of the Debt Securities, and the terms upon which the Debt Securities
are issued and may be authenticated and delivered.

     The Debt Securities may be issued in one or more series, which different series may be issued
in various aggregate principal amounts, may mature at different times, may bear interest (if any)
at different rates, may have different conversion prices or exchange provisions (if any), may be
subject to different redemption provisions (if any), may be subject to different sinking, purchase
or analogous funds (if any), may be subject to different covenants and Events of Default and may
otherwise vary as provided or permitted in the Indenture. This Debenture is one of the series of
Debt Securities of the Company issued pursuant to the Indenture designated as the 6.75% Debentures
due 2039 (the “Debentures”), initially limited in aggregate principal amount to $1,500,000,000.
The Company may, without the consent of the Holders of the Debentures, issue additional debentures
having the same ranking, interest rate, maturity and other terms as the Debentures. Any additional
debentures will, together with the Debentures, constitute a single series of the Debentures under
the Indenture. No additional debentures may be issued if an Event of Default has occurred with
respect to the Debentures.

     The Company promises to pay interest from June 29, 2009, on the principal amount of this
Debenture semi-annually on June 15 and December 15 of each year beginning December 15, 2009 at the
office or agency of the Company in the Borough of Manhattan, The City of New York, in like coin or
currency, at the rate per annum specified in the title hereof. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months. If interest or principal on this Debenture is
payable on a Saturday, Sunday or any other day when banks are not open for business in The City of
New York, the Company will make the payment on the next business day, and no interest will accrue
as a result of the delay in payment.

 

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     Each of TW NY and TWE, as primary obligor and not merely as surety, irrevocably and
unconditionally guarantees, to each Holder of Debentures, and to the Trustee and its successors and
assigns, (i) the full and punctual payment of principal of and interest on the Debentures when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under the Indenture (including obligations to the Trustee) and the
Debentures and (ii) the full and punctual performance within applicable grace periods of all other
obligations of the Company under the Indenture and the Debentures.

     The Guarantees constitute guarantees of payment, performance and compliance and not merely of
collection. The obligation of the Guarantors to make any payments may be satisfied by causing the
Company or any other Person to make such payments. Further, the Guarantors agree to pay any and all
costs and expenses (including reasonable attorney’s fees) incurred by the Trustee or any Holder of
Debentures in enforcing any of their respective rights under the Guarantees.

     The interest so payable, and punctually paid or duly provided for, on any June 15 or December
15 will, except as provided in the Indenture, be paid to the Person in whose name this Debenture
(or one or more Predecessor Securities) is registered at the close of business on the June 1 or
December 1 next preceding the interest payment date (herein called the “Regular Record Date”)
whether or not a Business Day, and may, at the option of the Company, be paid by check mailed to
the registered address of such Person. Any such interest which is payable, but is not so punctually
paid or duly provided for, shall forthwith cease to be payable to the registered Holder on such
Regular Record Date and may be paid either to the Person in whose name this Debenture (or one or
more Predecessor Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Debentures not less than 10 days prior to such Special Record Date, or may be paid at
any time in any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed and upon such notice as may be required by such
exchange, if such manner of payment shall be deemed practicable by the Trustee, all as more fully
provided in the Indenture.

     Initially, the Trustee will be the Paying Agent and Registrar with respect to this Debenture.
The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent
or Registrar, to appoint additional or other Paying Agents and other Registrars and to approve any
change in the office through which any Paying Agent or Registrar acts; provided that, there
will at all times be a Paying Agent in The City of New York.

     The Debentures will be redeemable at any time and from time to time, as a whole or in part, at
the option of the Company, on at least 30 days, but not more than 60 days, prior notice mailed to
the registered address of each Holder of the Debentures to be redeemed, at respective redemption
prices equal to the greater of (i) 100% of the

 

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principal amount of the Debentures to be redeemed and (ii) the sum of the present values of
the Remaining Scheduled Payments, as defined below, discounted to the redemption date, on a
semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury
Rate, as defined below, plus 40 basis points, plus, in either case, accrued interest to the date of
redemption that has not been paid (such redemption price, the “Redemption Price”).

     “Comparable Treasury Issue” means, with respect to the Debentures, the United States Treasury
security selected by an Independent Investment Banker as having a maturity comparable to the
remaining term (“Remaining Life”) of the Debentures being redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the Remaining Life of such Debentures.

     “Comparable Treasury Price” means, with respect to any redemption date for the Debentures:
(1) the average of two Reference Treasury Dealer Quotations for that redemption date, after
excluding the highest and lowest of four of such Reference Treasury Dealer Quotations; or (2) if
the Trustee obtains fewer than four Reference Treasury Dealer Quotations, the average of all
quotations obtained by the Trustee.

     “Independent Investment Banker” means one of the Reference Treasury Dealers, to be appointed
by the Company.

     “Reference Treasury Dealer” means four primary U.S. Government securities dealers to be
selected by the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount,
quoted in writing to the Trustee by such Reference Treasury Dealer at 3:00 p.m., New York City
time, on the third business day preceding such redemption date.

     “Remaining Scheduled Payments” means, with respect to each Debenture to be redeemed, the
remaining scheduled payments of the principal thereof and interest thereon that would be due after
the related redemption date but for such redemption; provided, however,
that, if such redemption date is not an interest payment date with respect to such
Debenture , the amount of the next succeeding scheduled interest payment thereon will be deemed to
be reduced by the amount of interest accrued thereon to such redemption date.

     “Treasury Rate” means, with respect to any redemption date for the Debentures: (1) the yield,
under the heading which represents the average for the immediately preceding week, appearing in the
most recently published statistical release designated “H.15(519)” or any successor publication
which is published weekly by the

 

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Board of Governors of the Federal Reserve System and which establishes yields on actively
traded United States Treasury debt securities adjusted to constant maturity under the caption
“Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue;
provided that if no maturity is within three months before or after the maturity date for
the Debentures, yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or
extrapolated from those yields on a straight line basis, rounding to the nearest month; or (2) if
that release, or any successor release, is not published during the week preceding the calculation
date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield
to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price
for that redemption date. The Treasury Rate will be calculated on the third business day preceding
the redemption date.

     On and after the redemption date, interest will cease to accrue on the Debentures or any
portion thereof called for redemption, unless the Company defaults in the payment of the Redemption
Price, and accrued interest. On or before the redemption date, the Company shall deposit with a
paying agent, or the Trustee, money sufficient to pay the Redemption Price of and accrued interest
on the Debentures to be redeemed on such date. If the Company elects to redeem less than all of the
Debentures of a series, then the Trustee will select the particular Debentures of such series to be
redeemed by such method as the Trustee deems fair and appropriate.

     If an Event of Default with respect to the Debentures shall occur and be continuing, the
principal of all the Debentures and all accrued interest thereon may be declared due and payable in
the manner, with the effect and subject to the conditions provided in the Indenture.

     The Indenture permits, with certain exceptions as therein provided, the Company and the
Trustee to enter into supplemental indentures to the Indenture for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of
modifying in any manner the rights of the Holders of the Debt Securities of each series under the
Indenture with the consent of the Holders of not less than a majority in principal amount of the
Debt Securities at the time Outstanding of all Series to be affected thereby (acting as one class).
The Indenture also permits the Holders of a majority in principal amount of the Debt Securities at
the time Outstanding of each series on behalf of the Holders of all Debt Securities of such series
to waive compliance by the Company with certain provisions of the Indenture and certain past
defaults and their consequences with respect to such series under the Indenture. Any such consent
or waiver by the Holder of this Debenture shall be conclusive and binding upon such Holder and upon
all future Holders of this Debenture and of any Debenture issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver
is made upon this Debenture or such other

 

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Debenture. The Indenture also permits the release of a Guarantor from its obligations under
its Guarantee in certain circumstances without the consent of the Holders of the Debt Securities.

     No reference herein to the Indenture and no provision of this Debenture or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal and any premium of and any interest on this Debenture at the place, rate and
respective times and in the coin or currency prescribed herein and in the Indenture.

     As provided in the Indenture and subject to the satisfaction of certain conditions therein set
forth, including the deposit of certain trust funds in trust, at the Company’s option, either
(i) the Company and the Guarantors shall be deemed to have paid and discharged the entire
indebtedness represented by, and the obligations under, the Debt Securities of any series and to
have satisfied all the obligations (with certain exceptions) under the Indenture relating to the
Debt Securities and the Guarantees of such series or (ii) the Company and the Guarantors shall
cease to be under any obligation to comply with any term, provision or condition of certain
restrictive covenants or provisions set forth in any additions or changes to or deletions from
covenants and Events of Default with respect to the Debt Securities and the Guarantees of such
series.

     The Debentures are issuable in registered form without coupons, in a minimum denomination of
$2,000 and integral multiples of $1,000 in excess of $2,000. Debentures may be exchanged for a like
aggregate principal amount of Debentures of other authorized denominations at the office or agency
of the Company in the Borough of Manhattan, The City of New York, and in the manner and subject to
the limitations provided in the Indenture.

     Upon due presentment for registration of transfer of this Debenture at the office or agency of
the Company in the Borough of Manhattan, The City of New York, a new Debenture or Debentures of
authorized denominations for a like aggregate principal amount will be issued to the transferee in
exchange therefor, subject to the limitations provided in the Indenture.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax, assessment or other governmental
charge payable in connection therewith.

     Subject to the provisions of the Indenture, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

 

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     Unless otherwise defined herein, all terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

     THIS DEBENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.

     Unless the certificate of authentication hereon has been manually executed by or on behalf of
the Trustee under the Indenture, this Debenture shall not be entitled to any benefits under the
Indenture, or be valid or obligatory for any purpose.

     The Company will furnish to any Holder upon written request and without charge to the Holder a
copy of the Indenture. Requests may be made to Time Warner Cable Inc., 60 Columbus Circle, New
York, NY 10023, Attention of Investor Relations.

 

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SCHEDULE OF EXCHANGES OF SECURITIES

     The following exchanges or redemptions of a part of this Global Security have been made:

	 	 	 	 	 
	 	 	Amount of Decrease in	 	Amount of Increase in
	 	 	Principal Amount	 	Principal Amount
	 	 	of this	 	of the
	Date of Transaction	 	Global Security	 	Global Security
	 
	 	 	 	 

 

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ASSIGNMENT FORM

To assign this Debenture , fill in the form below:

I or we assign and transfer this Debenture to

	 	 	 
	 

	 	 
	 
	 	 
	 

(Insert assignee’s soc. sec. or tax ID no.)

	 	 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                             
agent to transfer this Debenture on the books of the Company. The agent may substitute another to
act for him.

 

	 	 	 	 	 	 	 
	Date:

	 	 	 	Your Signature:	 	 
	 

	 	 
	 	 	 	 

 

(Sign exactly as your name appears on the other side of this Debenture )Exhibit 10.26

Exhibit 10.26

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	LOAN NUMBER	 	LOAN NAME	 	 	ACCT. NUMBER	 	 	AGREEMENT DATE	 	 	INITIALS	 
	1759	 	Eldorado Artesian Springs, Inc.	 	 	 	300117	 	 	 	03/17/09	 	 	RA

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOTE AMOUNT	 	INDEX (w/Margin)	 	 	RATE	 	 	MATURITY DATE	 	 	LOAN PURPOSE	 
	$300,000.00	 	Not Applicable	 	 	8.000%
Creditor Use Only	 	 	 	06/30/09	 	 	Commercial

COMMERCIAL LOAN AGREEMENT

Single Advance Loan

DATE AND PARTIES. The date of this Commercial Loan Agreement (Agreement) is March 17, 2009. The
parties and their addresses are as follows:

LENDER:

AMERICAN NATIONAL BANK 1360 Walnut Street, 
Suite 100 Boulder, CO 80302

BORROWER:

ELDORADO ARTESIAN SPRINGS, INC. a Colorado Corporation

1783 Dogwood Street

Louisville, CO 80027

DOUGLAS A, LARSON

31 Fowler Lane

Eldorado Springs, CO 80025

KEVIN M. SIPPLE

12 Baldwin Circle

Eldorado Springs, CO 80025

JEREMY S. MARTIN

2707 4th Street

Boulder, CO 80304

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 $300,000.00 (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 June 30, 2009.

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. This is a business-purpose loan transaction.

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. 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.

D. Additional Financial Statements Term.

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

(2) Quarterly 10-QSB Forms: Borrower will provide quarterly 10-QSB forms, within 30 days of
filing due date.

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

(4) 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.

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

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

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 before organizing, merging into, or
consolidating with an entity; acquiring all or substantially all the assets of another;
materially changing the legal structure, management, ownership or financial condition; or
effecting or entering into a domestication, conversion or interest exchange.

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. 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.

K. Additional Covenants.

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

121 Tangible Net Worth: Borrower will maintain minimum tangible net worth of $1,000,000.00
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.

131 Capital Expenditures: Borrower will not undertake any capital expenditures greater than
$300,000.00 in any given year without the Bank’s written consent.

(4) Debt Service Coverage Ratio: Borrower will maintain an annual, minimum Debt Service Coverage
Ratio IDSCRI 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.

O. 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 5(a)(3) 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. In the event of a dispute, the
exclusive forum, venue and place of jurisdiction will be in Colorado, unless otherwise required by
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	 	 
	 
	 	 	 	 
	 	 	 
	Kevin M. Sipple Individually	 	 
	 
	 	 	 	 
	 	 	 
	Jeremy S. Martin Individually	 	 

 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LOAN NUMBER	 	 	ACCT. NUMBER	 	 	MODIFICATION DATE	 	 	NOTE AMOUNT	 
	 
	 	1759	 	 	300117	 	 	03/17/09	 	 	$ 300,000.00	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	AMENDED	 	 	 	 	 	 	 	 	 	 	 	 
	OBLIGATION	 	 	 	 	 	 	 	 	 	 	 	 
	INFORMATION	 	MATURITY DATE	 	 	INDEX lw/margin)	 	 	INTEREST RATE	 	 	INITIALS	 
	 
	 	06/30/09	 	 	Not Applicable	 	 	8.000%	 	 	RA	 

DEBT MODIFICATION AGREEMENT

DATE AND PARTIES. The date of this Debt Modification Agreement (Modification) is March 17, 2009.
The parties and their addresses are:

LENDER:

AMERICAN NATIONAL BANK 1360 
Walnut Street, Suite 100 Boulder, CO 80302

Telephone: 1303) 394-5100

BORROWER:

ELDORADO ARTESIAN SPRINGS, INC.
 a Colorado Corporation

1783 Dogwood Street

Louisville, CO 80027

DOUGLAS A. LARSON

31 Fowler Lane

Eldorado Springs, CO 80025

KEVIN M. SIPPLE

12 Baldwin Circle

Eldorado Springs, CO 80025

JEREMY S. MARTIN 2707 4th Street

Boulder, CO 80304

1. DEFINITIONS. In this Modification, these terms have the following meanings:

A. Pronouns. The pronouns “I,” “me,” and “my” refer to each Borrower signing this Modification,
individually and together with their heirs, executors, administrators, successors, and assigns.
“You” and “your” refer to the Lender, with its participants or syndicators, successors and
assigns, or any person or entity that acquires an interest in the Modification or the Prior
Obligation.

B. Amended Obligation. Amended Obligation is the resulting agreement that is created when the
Modification amends the Prior Obligation. It is described above in the AMENDED OBLIGATION
INFORMATION section.

C. Loan. Loan refers to this transaction generally. It includes the obligations and duties
arising from the terms of all documents prepared or submitted in association with the Prior
Obligation and this modification, such as applications, security agreements, disclosures, notes,
agreements, and this Modification.

D. Modification. Modification refers to this Debt Modification Agreement.

E. Prior Obligation. Prior Obligation refers to my existing agreement described above in the

PRIOR OBLIGATION INFORMATION section, and any previous extensions, renewals, modifications or
substitutions of it.

 

 

 

2. BACKGROUND. You and I have previously entered into a Prior Obligation. As of the date of this
Modification, the outstanding, unpaid balance of the Prior Obligation is $300,000.00. Conditions
have changed since the execution of the Prior Obligation instruments. In response, and for value
received, you and I agree to modify the terms of the Prior Obligation, as provided for in this
Modification.

3. TERMS. The Prior Obligation is modified as follows:

A. Interest. Our agreement for the payment of interest is modified to read:

(1) INTEREST. Interest will accrue on the unpaid Principal balance of the Loan at the rate of
8.000 percent (Interest Rate).

(a) Maximum Interest Amount. Any amount assessed or collected as interest under the terms of
the Loan 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.

(b) Statutory Authority. The amount assessed or collected on the Loan is authorized by the
Colorado usury laws under Colo. Rev. Stat. § 5-12-103,

(c) Accrual. Interest accrues using an Actual/360 days counting method.

B. Maturity and Payments. The maturity and payment provisions are modified to read:

(2) PAYMENT. I agree to pay the Loan in 4 payments. The Loan is amortized over 84 payments. I
will make 3 payments of $4,675.88 beginning on March 30, 2009, and on the 30th day of each
month thereafter, A single “balloon payment” of the entire unpaid balance of Principal and
interest will be due June 30, 2009.

Payments will be rounded to the nearest $.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.

C. Fees and Charges. As additional consideration for your consent to enter into this
Modification, I agree to pay, or have paid these additional fees and charges:

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

Loan. A(n) Loan fee of $1,000.00 payable from separate funds on or before today’s date.

Interest Due to 03/17/09 Loan #1759. A(n) Interest Due to 03/17/09 Loan #1759 fee of
$531.25 payable from separate funds on or before today’s date.

4. CONTINUATION OF TERMS. Except as specifically amended by this Modification, all of the terms of
the Prior Obligation shall remain in full force and effect.

5. WAIVER. I waive all claims, defenses, setoffs, or counterclaims relating to the Prior
Obligation, or any document securing the Prior Obligation, that I may have. Any party to the Prior
Obligation that does not sign this Modification, shall remain liable under the terms of the Prior
Obligation unless released in writing by you.

6. REASON(S) FOR MODIFICATION.

The reasons for this Debt Modification are as follows:

(1) To extend the Maturity Date from February 28, 2009 to June 30, 2009.

(2) To change the Interest Rate from Wall Street Journal Prime plus .50%, adjusting daily to
a Fixed Rate of 8.00%.

(3) To provide a new Loan Agreement.

 

 

 

7. ADDITIONAL TERMS.

This Debt Modification Agreement is a continuation of that Promissory Note dated February 24, 2000
and any amendments and modifications thereto and represents a continuation of the indebtedness
evidenced thereby. Loan balances referred to in this agreement may be the balances in effect as of
the date this agreement was prepared. All terms and conditions, except as specifically modified
herein, of the Prior Obligations are hereby ratified and confirmed. Consent by Lender to this
Modification does not waive Lender’s right to require strict performance of the Prior Obligations,
as modified, nor obligate Lender to make any future modifications. Borrower affirms that the
Lender has fully performed its obligations in regard to the indebtedness hereby being modified,
and that Borrower has no defenses to payment or right of offset against payments otherwise due.

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.

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

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	 	 
	 
	 	 	 	 
	 	 	 
	Kevin M. Sipple Individually	 	 
	 
	 	 	 	 
	 	 	 
	Jeremy S. Martin Individually	 	 

LENDER:

	 	 	 	 	 
	American National Bank	 	 
	 
	By	 	 	 	 
	 	 	 	 	 
	 	 	Roger Ayan, Market President

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