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<br />Linda J. Bassi, Esq. <br />September 12, 1997 <br />Page 4 <br /> <br />COMMENTS <br />Loan Contract <br /> <br />Introductory Paragraph: <br /> <br />Factual Recitals: <br /> <br />* <br /> <br />Rather than using High Mesa Farm (which is the address of the current president) as <br />the address for HCWUA, we suggest using the address of the current Secretary- <br />Treasurer, Norm Summers. His address is 4234 County Road 2B, Rush, <br />Colorado 80833. This address change should be made throughout the document. <br /> <br />* <br /> <br />Also, throughout the documents, HCWUA should be referred to as the "Borrower." <br />HCWUA is not a contractor, and we are concerned that there may be some confusion <br />if that term is used because some of your documents apparently were designed to <br />apply to a traditional contractor in a project entailing the construction of facilities. <br /> <br />* <br /> <br />Paragraph 5 should be expanded to include the purposes in addition to the purchase <br />of the "Box Springs Water Rights" for which HCWUA may use the loan proceeds, <br />as discussed above. The term "PROJECT" then could used to refer to all purposes <br />for which HCWUA may use the loan funds. <br /> <br />* <br /> <br />Paragraph 7 should be rewritten to reflect that only the funds required for purchase <br />of the Box Springs water rights (i.e. $520,000 less the $16,000 payment made in <br />1997, or $504,000) will be deposited into escrow. Further, this paragraph should <br />reflect that HCWUA and Box Springs will close on the purchase of the Box Springs <br />water rights if the contingencies of the Purchase Agreement (e.g. acceptable title) are <br />satisfied. <br /> <br />* <br /> <br />Paragraph 9 should reflect that the loan contingency of settlement of Case <br />No. 95 CW 211 has occurred. Please see paragraph 3 of Judge Anderson's Order <br />Granting Joint Motion, dated March 19, 1997, in Case No. 95 CW 211. <br /> <br />Section A - BORROWER'S Agreements <br /> <br />* <br /> <br />With respect to paragraph 2, we question the need for liability insurance. This is not <br />the usual type of "project" that entails physical construction and operations with <br />attendant risk for the State. Further, the collateral for the loan would not be impaired <br />