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~ <br />L~ <br />Promissory Note <br />Date: February 1, 2002 Date of Completion ~~~ r.~~ ~r:s ~ 2Gb~ <br />1. FOR VALUE RECEIVED, the Peoples Ditch Company ("BORROWER") promises to pay the State of Colorado <br />Water Conservation Board ("STATE"), the principal sum of Forty Three 7housand Dollars ($43,000) plus interest <br />at the rate of 3.75% per annum for a term of twenty (20) years, pursuant to Loan Contract No. C150049 dated <br />February 1, 2002 ("LoAN CorvTRaC~r"). <br />2. Principal and interest shall be payable in equal instaliments of $3094.37, with the first payment due and payable <br />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 20 years thereafter. <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 <br />impose a late charge in the amount of 5% of the an ent. <br />5. This Note may be prepaid in whole or in p~t ithout premium or penalty. Any partial prepayment <br />shall not postpone the due date of any subs nt payme r ange the amount of such payments. <br />6. All payments received shall be applied ' ate a e,~I , next to accrued interest and then to reduce <br />the principal amount. ~ <br />7. This Note is issued pursuant to the Loa,tv Corv'r'wo,CT between th@ STATE 811d thG' BORROWER. The LOAN <br />CorvrRa,cr creates security int~rests in favor of the ST,aTE to secure the prompt payment of all amounts that <br />may become due hereunder. The security interests, evidenced by a Security Agreement, an Assignment of <br />Certificate of Deposit and an Assignment of Deposit Account as Security, cover certain revenues and accounts <br />Of the BORROWER. The LOAN CONTR,4CT, Security Agreement and Assignments grant additional rights to the <br />STATE, 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 CotvTw>cr or the Security Agreement <br />or Assignments securing this Note occurs, the STATE may declare the entire outstanding principal balance of <br />the Note, all accrued interest, and any outstanding late charges immediately due and payable, and the <br />indebtedness shall bear interest at the rate of 7% per annum from the date of default. The STATe shall give the <br />BoRROwER written notice of any alleged default and an opportunity to cure within thirty (30) days of receipt of <br />such notice before the BoRROwER shall be considered in default for purposes of this 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 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 />afl 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 />10. This Note shall be governed in all respects by the laws of the State of Colorado. <br />' BoRROwER: Peoples Ditch Company, a Colorado <br />~ nonprofit corporation~ <br />~SEAL) <br />By <br />~ ' Tom Desot , e ident <br />Attesf: ; ~ <br />, <br />By_ Clr.w' <br />~arrin.MePiuell , Corporate Secretary <br />Appendix 2 to Loan Contract C150049 <br />/ <br />~ <br />