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PROMISSORY NOn: Date:'-II1~ J ,1999 DateofComPleti04MLLJ /4 ,1999 1. fOR VALUE RECEIVED, The Buffalo Mutual Irrigation Company ("BORROWER") promises to pay the State of Colorado Water Conservation Board ("STATE"), the principal sum of $453,250.00 plus interest at the rate of three and three-quarters percent (3.75%) per annum for a term of thirty (30) years, pursuant to Loan Contract No. C153793 ("LOAN CONTRACT"). 2. The first payment of $25,421.72 shall be due one year from the date that the State determines that the project is substantially complete, and annually thereafter until the entire principal sum, all accrued interest, and all late charges. if any, shall have been paid in full. 3. Payments shall be made payable to the Colorado Water Conservation Board and mailed to 1313 Sherman Street, Room 721, Denver, Colorado 80203. 4. If the STATE does not receive the annual payment within 15 calendar days of the due date, the State may impose a late charge in the amount of 5% of the annual payment. 5. This Note may be prepaid in whole or in part at any time w~hout premium or penalty. Any partial prepayment shall not postpone the due date of any subsequent payments or change the amount of such payments. 6. All payments received shall be applied first to late charges, if any, next to accrued interest and then to reduce the principal amount. 7. This Note is issued pursuant to the LOAN CONTRACT between the STATE and the BoRROWER. The LOAN CoNTRACT creates security interests in favor of the STATE to secure the prompt payment of all amounts that may become due hereunder. The security interests, evidenced by a Security Agreement and an Assignment of Certificate of Deposit, cover certain revenues and accounts of the BORROWER. The LOAN CoNTRACT, Security Agreement and Assignment grant add~ional rights to the STATE, including the right to accelerate the maturity of this Nole in certain events. 8. If any annual payment is not paid when due or any default under the LOAN CONTRACT or the Security Agreement or Assignment securin9 this Note occurs, the STATE may declare the entire outstanding principal balance of the Note, all accrued interest, and any outstanding late charges immediately due and payable, and the indebtedness shall bear interest at the rate of 15% per annum from the date of default. The STATE shall give the BORROWER written notice of any alleged default and an opportunity to cure within thirty (30) days of receipt of such notice before the BORROWER shall be considered in default for purposes of this Promissory Note. 9. The BORROWER, any guarantor, and any other person who is now or may hereafter become primarily or secondarily liable for the payment of this Note or any portion thereof hereby agree that if this Note or interest thereon is not paid when due or if suit is brought, then it shall pay all reasonabie costs of collection, including reasonabie attorney fees. In the event of any bankruptcy or similar proceedings, costs of collection shall include all costs and attomey fees incurred in connection with such proceedings, including tne fees of counsel for attendance at meetings of creditors' committees or other committees. 10. This Note shall be govemed in all respects by the laws of the State of Colorado. BORROWER: The Buffalo Mutual Irrigation Company, a Colorado nonprofit corporation B~(jJA;;J:~~h~~ki~ ($ EAL) Attest: By '"'~tt:~. William Leiker, Secreta Attachment B - Contract No. C153793 Amendment No.2