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<br />PROMISSOR1t' NOTE
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<br />Date SQjI J 7 , 1998 Date of Substantial Completion
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<br />1. FOR VALUE RE.CfilllED, The Western Mutual Ditch Company ("BORROWER") promises to pay the State of
<br />Colorado Water Conservation Board ("STATE"), the principal sum of $100,000 plus interest at the rate of 3,75
<br />percent per annum for a term of 20 years, pursuant to Loan Contract No, C153857 ("LOAN CONTRACT"),
<br />
<br />2, The first payment of $7196.21 shall be due one year from the date that the State determines that the project is
<br />sLJbstantially 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.
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<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,
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<br />4. If the STATE does not receive the annual payment witnin 15 calendar days of the due date, the State may impose
<br />a late charge in the amount of 5% of the annual payment.
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<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,
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<br />6. All payments received shall be applied first to late charges, if any, next to accrued interest and then to reduce the
<br />principal amount.
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<br />7. 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 S,ATE 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 DepDsit 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.
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<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,
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<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, thBn 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.
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<br />10. This Note shall be govemed in all respects by the laws of the State of Colorado,
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<br />BORROWER: The Western Mutual Ditch Company,
<br />a Colorado nonprofit corporation
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<br />BY~"~~~t Y3z~,
<br />
<br />(SEAL)
<br />
<br />Attest:
<br />
<br />By'-j~jC/1 ['cJc.J1Md.1
<br />Corporate Secretary
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<br />Appendix 2 to Loan Contract C153857
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