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~,:.. <br />~ F <br />r ~ ~ <br />Promissory Note <br />Date 4 = , 1998 <br />1. iEOR YALU£ lit£C£N£D, The Farmers Pawnee Canal Company ("BORROWER) promises to pay the State of <br />Colorado Water Conservation Board ("STATE"), the principal sum of $22,250.00 plus interest at the rate of 3.5 <br />percent per annum for a term of 10 years, pursuant to Loan Contract No. C153825 ("LOAN CONTRACT"). <br />2. The first payment of $2,675.37 shall be due one year from the date that the State determines that the project is <br />substantially complete, and annually thereafter until the entire principal sum, all accrued interest, and all late <br />charges, if any, shall have been paid in full. <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 />4. If the STATE does not receive the annual payment within 15 calendar days of the due date, the State may impose <br />a late charge in the amount of 5% of the annual payment. <br />5. This Note may be prepaid in whole or ' -/y~r without premium or penalty. Any partial prepayment <br />shall not postpone the due date of any su yments change the amount of such payments. <br />6. All payments received shall be applied first to I g s ext to accrued interest and then to reduce the <br />principal amount. <br />7. This Note is issued pursuant to th~ AN 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 that may <br />become due hereunder. The security interests, evidenced by a Security Agreement, an Assignment of Certificate <br />of Deposit, and an Assignment of Deposit Account as Security, cover certain revenues and accounts of the <br />BORROWER. The LOAN CONTRACT, Security Agreement and Assignments grant additional rights to the STATE, <br />including the right to accelerate the maturity of this Note in certain events. <br />8. If any annual payment is not paid when due or any default under the LOAN CONTRACT, the Security Agreement or <br />the Assignments securing this Note occurs, the STATE may declare the entire outstanding principal balance of the <br />Note, all accrued interest, and any outstanding late charges immediately due and payable, without notice or <br />demand, and the indebtedness shall bear interest at the rate of 15% 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 />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 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 attomey fees incurred in connection with such proceedings, including the fees of counsel for <br />attendance at meetings of creditors' committees or other committees. <br />10. This Note shall be governed in all respects by the <br />RRO. <br />a ra c ra on <br />(SEAL) <br />Attest: <br />B <br />v ~. -- <br />Sandra Ils, Secretary <br />Appendix 2 to Loan Contract C153825 <br /> <br />the State of Colorado. <br />The Farmers Pawnee Canal Company, <br />Steve Wagner, <br />