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<br />Colorado Water Conservation Board <br />Department of Natural Resources <br />1313 Sherman Street <br />Denver, Colorado 80203 <br />Phone: (303) 866-3441 <br />FAX: (03) 866-4474 <br /> <br />~cJ~e <br />July 9, 1999 <br /> <br />STATE OF COLORADO <br /> <br />. <br /> <br />J~ g r4 - <br /> <br />Bill Owens <br />Governor <br /> <br />The San Luis Valley Canal Company <br />Attn: Harvey Smalley, President <br />902 Weber Drive <br />Alamosa, CO 81101 <br /> <br />SUBJECT: Loan Contract C150007 <br /> <br />Dear Mr. Smalley: <br /> <br />This is to confirm the current situation of the loan from the Colorado Water Conservation Board <br />and the San Luis Valley Canal Company. <br /> <br />In 1997 the CWCB approved a $188,000 loan to the Company. The Company's stockholders <br />approved the loan at its 1997 Annual Stockholders Meeting. However, it was determined that the <br />stockholders' resolution was insufficient due to Article X of the company's bylaws that states "... <br />the total amount borrowed shall not exceed $10,000 at any time and provided further that no <br />mortgage or trust deed sha7f beplaced upon the property of the company or any part thereof until <br />authorized by a two-thirds vote of the stockholders of the company." Emmy Pollock, attorney for <br />the Company, determined that the stockholders would probably need to amend the bylaws in <br />order to accept the CWCB loan. <br /> <br />I spoke with Dorothy Morgan, corporate secretary for the Company, and she said that the Board <br />of Directors had decided to wait until its next annual stockholders meeting (next winter) to amend <br />the bylaws rather than call a special meeting. Therefore, the construction on the project and the <br />loan contract would be put on hold until next year. <br /> <br />Enclosed are proposed resolutions that the stockholders and board of directors can adopt after <br />the bylaws are amended. These resolutions satisfy the loan as well as the collateral and pledge <br />of revenues terms. Let me know if you have any questions regarding the contracting process or <br />the resolutions. <br /> <br />Greg E. Walcher <br />Executive Director, DNR <br /> <br />Peter H. Evans <br />Director, ewes <br /> <br />Unless someone from the Company contacts the CWCB, we will look forward to working with you <br />on the loan contract and the construction project after your next annual stockholders meeting. <br /> <br />Sincerely, <br /> <br /> <br />(~~ <br /> <br />ha Contract Administrator <br />nstruction Fund Section <br /> <br />cc: Paddock, Esq. <br />Cann, AGO <br />Serlet, CWCB <br />