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<br />PROMISSORY- NOTE
<br />
<br />Principal Amount::
<br />Term:
<br />
<br />$3,688,567.74
<br />40 Years
<br />
<br />Interest Rate:
<br />Loan Payment:
<br />
<br />3%
<br />$122,000 - 1st 10 years
<br />$181,553.73 - remaining 30 years
<br />Loan Contract:: #C153715 Date: May t.gn.. , 1997
<br />
<br />1. fOR VALUE RECEIVED, the Lower Arkansas Water Management Association ("BORROWER") promises to
<br />pay the State of Colorado Water Conservation Board ("STATE"), the principal sum of $3,688,567.74 with
<br />annual payments of $122,000.00 for the first ten years, and $181,553.73 thereafter, based on the effective
<br />interest rate of 3% per annum on the outstanding principal balance for a term of 40 years, or until paid in
<br />full, pursuant to Loan Contract #C153715 ("LOAN CONTRACT").
<br />
<br />2. Annual payments shall be made on or before May 1st of each year until the entire principal sum and any
<br />accrued interest shall have been paid in full. The first payment was made on May 1, 1997
<br />
<br />3 All payments received shall be applied first to accrued interest and then to the retirement of the principal.
<br />Payments shall be made payable to the Colorado Water Conservation Board and mailed to 1313 Sherman
<br />Street, Room 721, Denver, Colorado 80203.
<br />
<br />4. This Note may be prepaid in whole or in part at any time without premium or penalty, with prepayments
<br />applied first to any accrued interest and then to reduce the principal amount. Any partial prepayment shall
<br />not postpone the due date of any subsequent payments or change the amount of such payments.
<br />
<br />5. This Note is issued pursuant to the LOAN CONTRACT between the STATE and the BORROWER. The LOAN
<br />CONTRACT creates security interests in favor of the STATE to secure the prompt payment of all amounts
<br />which may become due hereunder. The security interests, evidenced by security agreements and deeds of
<br />trust, cover certain revenues, accounts and water rights of the BORROWER. The LOAN CONTRACT, security
<br />agreements and deeds of trust grant additional rights to the STATE, including the right to accelerate the
<br />maturity of this Note in certain events.
<br />
<br />S. :; all'j I-'O'j III~I" Ut !Jlli i01fJdi or Inlelt::0l ,.::> not palo prornpllY wi"lell Que Of' di lY deraul[ unaer the LOAN
<br />CONTRACT or the security agreements or deeds of trust securing this Note occurs, the STATE may declare
<br />the entire outstanding principal balance of the Note, and all accrued interest, immediately due and payable,
<br />without notice or demand, and the indebtedness shall bear interest at the rate of 3% per annum from the
<br />date of default.
<br />
<br />7. The BORROWER, any guarantor, and any successor of the BORROWER who may hereafter become primarily
<br />or secondarily liable for the payment of this Note or any portion thereof hereby agree that if this Note or
<br />interest thereon is not paid when due or suit is brought, then it shall pay all reasonable costs of collection,
<br />including reasonable attomey fees. In the event of any bankruptcy or similar proceedings, costs of
<br />collection shall include all costs and attorney fees incurred in connection with such proceedings, including
<br />the fees of counsel for attendance at meetings of creditors' committees or other committees.
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<br />8. This Note shall be govemed in all respects by the laws of the State of Colorado.
<br />
<br />BORROWER: Lower Arkansas Water
<br />Managemen s ciation
<br />
<br />By
<br />
<br />
<br />Attest: J. /J, r--
<br />
<br />BY~'..:i
<br />Donald F. Higbee, Secret.
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<br />
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