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<br />Promissory Note <br /> <br />Date &~~ \~ 2000 Date of Completion JaYl.ueu'r 1" 2tJ~2 <br /> <br />1. FOR VALUE RECEIVED, the Highland Ditch Company ("BORROWER") promises to pay the State of Colorado <br />Water Conservation Board ("STATE"), the principal sum of One Million Forty Thousand Dollars ($1,040,000) <br />plus interest at the rate of four percent (4%) per annum for a repayment term of thirty (30) years, pursuant to <br />Loan Contract No. C150015 ("LOAN CONTRACT"). <br /> <br />2. Principal and interest shall be payable in equal installments of $60,143.30, with the first payment due and <br />payable one year from the date that the State determines that the project is substantially complete, and annually <br />thereafter until all principal, interest, and all late charges, if any, have been paid in full. All principal, interest, and <br />late charges, if any, then remaining unpaid shall be due and payable 30 years thereafter. <br /> <br />3. 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. If the STATE does not receive the annual payment within 15 calendar days of the due date, the State may <br />impose a late charge in the amount of 5% of the annual payment. <br /> <br />5. This Note may be prepaid in whole or in part at any time without premium or penalty. Any partial prepayment <br />shall not postpone the due date of any subsequent payments or change the amount of such payments. <br /> <br />6. All payments received shall be applied first to ~ Cierl"P-y, next to accrued interest and then to reduce <br />tlle principal amount. < ): ~V' <br /> <br />7. This Note is issued pursuant to the LOAN CONTRA~:lth~TE and the BORROWER. The LOAN <br />CONTRACT creates security interests in favor 0 ,~~ the prompt payment of all amounts that <br />may become due hereunder. The securit t , e nced by a Security Agreement, a Deed of Trust and <br />an Assignment of Certificate of Deposit, cov rta n revenues, accounts and real property of the BORROWER. <br />The LOAN CONTRACT, Security Agreement, eed of Trust and Assignment grant additional rights to the STATE, <br />including the right to accelerate the maturity of this Note in certain events. <br /> <br />8. If any annual payment is not paid when due or any default under the LOAN CONTRACT or the Security Agreement <br />or Deed of Trust or Assignment securing this Note occurs, the STATE may declare the entire outstanding <br />principal balance of the Note, all accrued interest, and any outstanding late charges immediately due and <br />payable, and the indebtedness shall bear interest at the rate of 7% per annum from the date of default. The <br />STATE shall give the BORROWER written notice of any alleged default and an opportunity to cure within thirty <br />(30) days of receipt of such notice before the BORROWER shall be considered in default for purposes of this <br />Promissory Note. <br /> <br />9. The BORROWER, any guarantor, and any other person who is now or may hereafter become primarily or <br />secondarily liable for the payment of this Note or any portion thereof hereby agree that if this Note or interest <br />thereon is not paid when due or if suit is brought, then it shall pay all reasonable costs of collection, including <br />reasonable attorney fees. In the event of any bankruptcy or similar proceedings, costs of collection shall include <br />all costs and attorney fees incurred in connection with such proceedings, including the fees of counsel for <br />attendance at meetings of creditors' committees or other committees. <br /> <br />10. This Note shall be governed in all respects by the laws of the State of Colorado. <br /> <br />BORROWER: Highland Ditch Company, a Colorado <br />nonprotn corporation ~ <br /> <br />By 6? ~ ~ <br />Robert Schlagel, President .... <br /> <br />(SEAL) <br /> <br /> <br />By <br /> <br />M <br /> <br />Appendix 2 to Loan Contract C150015 <br />