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<br />BANK1iONE.
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<br />PROMISSORY NOTE
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<br />Borrower:
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<br />FARMERS INDEPEND~T DIT~HtJO i -1. :
<br />PO BOX 210 \):
<br />GREELEY. CO 80632
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<br />BANK ONE, COLORADO, N.A.
<br />DOWNTOWN GREaEY BUSINESS BANKING
<br />SEVENTH STREET AND 9TH AVENUE
<br />GREB...EY, CO 80631
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<br />Principal Amount: $50,000.00 Date of Note: October 31, 1997
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<br />PROMISE TO PAY. For value reeelved, FARMERS INDEPENDENT DITCH CO ("Borrower") promises to pay 10 BANK ONE, COLORADO. N.A.
<br />("Lender"), or order, In lawful money of the United Slates 01 America, the principal amount of Rny Thousand & 00/100 Dollars ($50,000.00)
<br />("Tolal Principal Amount") or so much as may be outslandlng, together with Interest on the unpaid outstanding principal balance from the dale
<br />advanced until paid In full.
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<br />PAYMENT. This Note .shall be payable as follows: The Qutstandlng principal balance of this Note, together with all accrued but unpaid
<br />Inlerest, shall be due and payable..on May 1, 1~98. Interest on this Note-is.computed on.a 365/360 simple interest basis; that Is, by applying the ratio
<br />of the annual Interest rate civer a year of 360 days, multiplied by the outstanding principal balance, mulllplied by the aclual number of days Ihe principal
<br />balance Is outstanding. Borrower wUl pay lender at the address designated by Lender from lime to lime in wrillng. JI any payment of principal 01 Of
<br />Interest on this Note shall become due on a day which Is not a Business Day, such payment shall be made on the nexl succeeding Business Day. As
<br />used herein, the term "Bustness Day" shall mean any day other than e Saturday, Sunday or any other day on Which nallonal banking assoclallons are
<br />authorized 10 be closed. Unless otherwise agreed to, In wrfting, or otherwise required by applicable law, payments will be applied first to accrued,
<br />unpaid Interest, then to principal, and any remaining amount to any unpaid collection costs, late charges and other charges, providad, however, upon
<br />dellnquency or other default, Lender reserves the right to apply payments among principal. Interest, late charges, collection costs and other charges at
<br />Its discretion. The books and records of lender shall be prima facie evidence of all outstandIng principal of and accrued but unpaid Interest on this
<br />Nole. ThiS Note may be executed In connection with a loan agreement. Any such loan agreement may contain additional rights, obligations and terms.
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<br />VARIABLE INTEREST RATE. The Interest rale on this Note Is sUbject to fluctuallon based upon lhe Prime Rate of Interest In effect from time
<br />to tIme (the "lndex")CWhlch rate may not be the lowest, best or most favorable rate of Interest whIch Lender may charge on loans to Its
<br />customers). "Prime Rate" Shall mean the rate announced from lime 10 time by Lender as lis prime rate. Each change In the rate to be charged
<br />on this Note will become effectiVe wlthoul notice on the same day as the Index changes. Except as otherwise provided herein, Ihe Unpaid
<br />principal balance of this Note will accrue Interest at a rate per annum which will Irom lime to lime be equal to the sum 01 the Index, plus
<br />2.000%. NOTICE: Under no circumstances will the Interest rate on this Note be more than the maximum rate allOWed by applicable law.
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<br />PREPAYMENT. Borrower may pay without fee atl 0( a portion of the principal amount owed hereunder eariier than II is due. All prepayments shall be
<br />applied 10 the Indebtedness owing hereunder In such order and manner as Lender may from Ume to Ume determine In ils sole discretion.
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<br />LATE CHARGE. If a payment is 10 days or more late, BorrowSf' will be charged 5.000% of the regulll1ly scheduled payment or $25.00, whichever
<br />Is greater, up 10 the maxImum amount of $250.00 per lale charge.
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<br />DEFAULT. Borrower wID be In default II any of the following happens: (a) Borrower lal1sto make any payment 01 principal or Interest when due under
<br />this Note or any other Indebtedness owing now or hSf'eafter by Borrower to Lender; (b) lallure of Borrower or any other party to comply wilh or perform
<br />any term, obligation, covenant or condlllon contained In this Note or In any other promissory nole, credil agreement, loan agreement, guaranty, security
<br />agreement, morlgage, deed 01 trust or any olher Instrument, agreement or document, whether now or hereafter exislfng, executed in connection with
<br />this Note (the Nota and all, such other Instruments, agreements, and documents shall be collectively known herein as Ihe "Related Documents~); (c)
<br />Any represenlal10n or statement made or furnished to Lender herein, In any of the Related Documents or In connecUon with any ollhe foregoing Is false
<br />or misleading In any malerlal respecl; (d) Borrower or any other party liable lor the payment 01. this Nole, whether as maker, endorser, guarantor, surety
<br />or olherwlse, becomes Insolvent or bankrupt, has a receIver or trustee appointed for any pari of its property, makes an assignment for the benefit 01 its
<br />creditors, or any proceeding is commenced eilher by any such party or against II under any bankrUptcy or insolvency laws; (a) tha occurrence of any
<br />avant of defautt specified In any of the other Related Documants or In any other agreement now or hereafter arising between Borrower and Lender; (I)
<br />the occurrence of any event which permits the acceleration of the maturity of any indebtedness owing now or hereafter by Borrower 10 any third parly;
<br />or (g) the liquidation, termination, dissolution, death or lagal incapacity of Borrower or any olher party liable for the payment of this Nole, whether as
<br />maker, endorser, guarantor, surety, or otherwise.
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<br />LENDER'S RIGHTS. Upon default, Lender may at ils opllon, without further nollce or demand (I) declare Ihe entire unpaid principal balance on this
<br />Note, aU accrued unpaid Interest and all other costs and expenses for which Borrower Is responsible for under this Note and any other Related
<br />Documentlmmediataly due, (ii) refuse to advance any additional amounts under lhis Note, (ill) foreclose all liens securing payment hereof, (iv) pursue
<br />any other rights, remedies and recourses available 10 the Lender, Including wilhout limitation, any such rights, remedies or recourses under Ihe Related
<br />Documents, at law or In equity, or (v) pursue any combination of the foregoing. Upon default, Including failure to pay upon final maturity, Lender, al ils
<br />opl1on, may also, if permmed under applicable law, do one or both of the following: (a) increase the variable Interest rate on this Note 10 5.000
<br />percentage points over the Index, and (b) add any unpaid accrued Interest to principal and such sum will bear interest therefrom until paid at the rale
<br />provided In this Note (including any increased rate). The Inlerest rate wlll nol exceed the maximum rate permitted by applicable law. Lender may hire
<br />an allorney to help collect this Nole If Borrower does not pay and Borrower will pay Lender's reasonable allorneys' fees and all other costs of colleclion,
<br />unless prohibited by applicable law. . This Note has been delivered to lender and accepted by Lender in lhe State of Colorado. SubJect to the
<br />provisions on arbitration, this Note shall be governed by and conslrued in accordance with Ihe laws of the State of Colorado without regard to any
<br />conflict 01 laws or provisions Ihereo!.
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<br />PURPOSE. Borrower agrees that no adva.nces under this Note shall be used lor persona!, family, or household purposes and that all advances
<br />hereunder shall be used solely for business, commercial, agricullural or other similar purposes.
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<br />JURY WAIVER. THE BORROWER AND lENDER (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
<br />UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPlITE (WHETHER BASED UPON CONTRACT,
<br />TORT OR OTHERWISE) BETWEEN BORROWER AND lENDER ARISING OUT OF OR IN ANY WAY RB.ATED TO THIS NOTE OR THE OTHER
<br />RELATED DOCUMENTS. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING EVIDENCED BY THIS
<br />NOTE.
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<br />DISHONORED ITEM FEE. Borrower will pay _ a lee to. .Lender of $20.00 ]f Borrower makes a payment on Borrower's loan and the check or
<br />preaulho.ri~d che.i-g~;:vilh which Bon-c'wer p~~'!~ laler ql~1",,:JnOr~d. .. . . .
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<br />RIGHT OF SETOFF. Unless a Uen ~outd be prohlblled by,law or would render a nontaxable account taxable, Borrower grants to lender a contractual
<br />possessory security Intereslln, and hereby assigns, conveys, delivers, pledges, and transfers to lender all Borrower's righi, tille and Interest in and to,
<br />Borrower's accounts wllh Lender (whether checkIng, savings, or any other account), Including wilhoutlimitatlon all accounts held jointly with someone
<br />else and all accounts Borrower may open In the futUre. Borrower authorizes Lender, to the exlent permllled by applicable law, to charge or setoflall
<br />sums owing on this Note against any and ail 'such accounts.
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<br />LINE OF CREDIT. This Note evidences a non-revolvlng line of credit. Once an amount equal to the Total Principal Amounl has been advanced
<br />hereunder, Borrower Is not entitled 10 further advances under this Nole. Advances under this Note, as well as direclions for payment from Borrower's
<br />accounts, may be requested orally or In wriling by Borrower or by an authorized person. Lender may, bul.need not, require that all oral requests be
<br />confirmed in writing. Borrower agrees 10 be liable for all sums either: (a) advanced In accordance with the Instructions of an authorized person or (b)
<br />credlled 10 any of Borrower's accounts with Lender.
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<br />ARBITRATION. Lender and Borrower agree that upon the wrillen demandl"f either party, whether made before or after the institution of any legal
<br />proceedings, but prior to Ihe rendering 01 any judgment In.lhal t:tr~edl~g(all disputes, claims end controversies between them, whether Individual,
<br />Joint, or class In nature, arising from this Note, any Related Doc.timenf'cir.,j)!hij;rwlse, Including withoullimitation contract disputes and lorl claims, shall
<br />be arbllrated pursuant to the Commercial Rules 01 the American Arbltrafron~ASsoclalion. Any arbitration proceeding held pursuant to thIs arbitration
<br />provisIon shall be conducted In the city nearest the Borrower's address haVing an AAA regional office, or al any other place selecled by mutual
<br />agreement of the partIes. No act to Iak.e or dispose of. any collateral shall cons liMe a waiver of lhis arbitration agreemenl or be prohibited by this
<br />arbltrallon agreement. This arbitration provision shall not I1mllthe rfght of either party during any dispute, claim or controversy 10 seek, use, and employ
<br />ancillary, provisional or prelimInary rights andlor remedies, Judicial or otherwIse, for the purposes of real1zlng upon, preserving, prolecting, foreclosing
<br />upon or proceeding under forcible enlry and delalner for possession of, any real or personal properly, and any such action shall not be deemed an
<br />elecllon 01 remedIes. This Includes, wilhout limitation, obtaining Injunctive relief or a temporary restraining order, invoking a power of sale under any
<br />deed of trust or mortgage, obtaining a writ of allachmenl or Imposition of:a receivership, or exercising eny righls relaling to personal property, including
<br />takJng or disposing of such property with or without Judicial process pursuant to Article 9 of the Uniform Commercial Code. Any disputes, claims, or
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