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<br />Promissory Note <br /> <br />,1999 <br /> <br />Date of Substantial Completion fJ1 r< y /) 2. 000 <br /> <br />Date , ,- , <br /> <br />1. For Value Received, the Sterling Irrigation Company, a Colorado nonprofit corporation <br />("BORROWER") promises to pay the State of Colorado Water ConseNation Board <br />("STATE"), the principal sum of Three Hundred Eighteen Thousand Five Hundred <br />Eighty Three Dollars ($318,583) plus interest at the rate of three and three-quarters <br />percent (3.75%) per annum for a term of thirty (30) years, pursuant to Loan Contract <br />No. C150024 ("LOAN CONTRACT"). <br /> <br />2. The first payment of $17,868.56 shall be due one year from the date that the State <br />determines that the project is substantially complete, and annually thereafter until the <br />entire principal sum, all accrued interest, and all late charges, if any, shall have been <br />paid in full. <br /> <br />3. Payments shall be made payable to the Colorado Water ConseNation Board and <br />mailed to 1313 Sherman 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 <br />date, the State may 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. <br />Any partial prepayment shall not postpone the due date of any subsequent payments <br />or change the amount of such payments, <br /> <br />6. All payments received shall be applied first to late charges, if any, next to accrued <br />interest and then to reduce the principal amount. <br /> <br />7. This Note is issued pursuant to the LOAN CONTRACT between the STATE and the <br />BORROWER. The LOAN CONTRACT creates security interests in favor of the STATE to <br />secure the prompt payment of all amounts that may become due hereunder. The <br />security interests, evidenced by a Security Agreement and an Assignment of <br />Certificate of Deposit and an Assignment of Deposit Account as Security, cover. <br />certain revenues and accounts of the BORROWER. The LOAN CONTRACT, Security <br />Agreement and Assignments grant additional rights to the STATE, including the right to <br />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 <br />or the Security Agreement or Assignments securing this Note occurs, the STATE may <br />declare the entire outstanding principal balance of the Note, all accrued interest, and <br />any outstanding late charges immediately due and payable, and the indebtedness <br />shall bear interest at the rate of 7% per annum from the date of default. The STATE <br />shall give the BORROWER written notice of any alleged default and an opportunity to <br />cure within thirty (30) days of receipt of such notice before the BORROWER shall be <br />considered in default for purposes of this Promissory Note. <br /> <br />Appendix 2 to Loan Contract C150024 <br />