LPPD000350

• Contract/PO #: C153682
• Contractor Name: Caryl R. Carroll
• Contract Type: Loan
• Water District: 43
• County: Rio Blanco
• Bill Number: HB 93-1273
• Loan Projects - Doc Type: Contract Documents

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STATE ~ COLOMDO

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Colorado Water Conservation Board

Department of Natural Resources RECEIVED
721 Centennial Building
131 3 Sherman Street A 2
Denver, Colorado 80203 UG 6 1996
Phone: [phone]
FAX: [phone]

Colorado Water
Conservation Board

Roy Romer
Governor

August 14, 1996

James 5, Lochhead
Executive Director, DNR

Daries C Lile, PE.
Director, CWCS

Mrs. Caryl R. Carroll
P.O. Box 219
Cocoa, FL 32923-0219

RE: Caryl R. Carroll to Carroll Davidson Partnership, L TD--Colorado Water
Cons~rvation Board ("C'vVCB"j Loan Contrat;t No. C-153682

Dear Mrs. Carroll:

You have advised the CWCB that you desire to transfer your ranch and
associated water rights in Rio Blanco County, Colorado, to a family limited partnership
known as the Carroll Davidson Partnership, Ltd. Because you have conveyed a
security interest in the water rights to the CWCB pursuant to Loan Contract No. C-
153682 ("Contract"), you have requested that the CWCB waive its right under the
Uniform Commercial Code Security Agreement and Financing Statement ("UCC
Agreement") executed by you as part of the Contract to declare the loan in default as
a result of this transfer. You have provided the CWCB with a copy of the partnership
agreement to assist in its evaluation of your request.

The UCC Agreement contains what is commonly known as a "due-on-sale"
clause. The CWCB does not belieJt:e_lt is necessary to address the question of
whether the proposed transfer would violate this provision.

To the extent necessary, the CWCB waives the right it might otherwise have
to declare your loan in default by reason of this transfer, subject, however~ to the
following conditions:

1. This waiver by the CWCB does not release you, individually, from liability for
the payment of the debt evidenced by the Contract;

2. The documents of transfer must specifically state that the Carroll Davidson
Partnership, Ltd. assumes and agrees to pay this indebtedness;

3. The CWCB, as secured party, must, in the near future, file a Continuation
Statement for the continued perfection of its security interest. That
continuation statement will name both you as an individual and the Carroll
Davidson Partnership, Ltd., as the debtors. If necessary, both you and the