PROJ01987 ‎(2)‎

• Contract/PO #: FS0079FX
• Contractor Name: Ortiz Ditch Company
• Water District: 0
• Loan Projects - Doc Type: Approval Letter

2

Mr. Rodger Gallegos
Ortiz Ditch Company
March 3, 1995

b. You must adhere to all standard contracting provisions of the CWCB. Since the Ortiz
ditch Company is not incorporated in the state of Colorado, here are some options to
allow us to contract with you:

1) The Ortiz Ditch Company may incorporate. I have attached sample Articles
of Incorporation and Bylaws for a recently formed ditch company. You and your
attorney will have to develop similar documents for your company, and properly
file them the Secretary of State's Office.

2) The Ortiz Ditch Company may request that the Rio Grande Water Conservancy
District (or other Water Conservancy District) act as sponsor for the loan contract.
We would contract directly with the District. You would be assessed by the
District so they could make payments in your behalf.

3) The CWCB could contract directly with the group of individuals shareholders
with the Ortiz Ditch Company. In this case, each individual will have to put up
collateral for the entire loan, and joint and several liability would apply. This
means that each individual will be responsible for the entire loan and could lose
their collateral, whether or not he or she had paid their portion of the: loan. This
leaves the minority share holder in a bad situation, if the majority shareholder
were to default.

c. An approved contract must be in place before the CWCB can release any funds for the
proiect. Ms. Jan Illian of this office will draft the contract, and can send you an
advanced review copy upon request. Final contract documents will be sent to you for
signing after the Construction Fund Bill is signed by the Governor, about June 1, 1995.
Please contact Jan (866-3441) after March 15, 1995 to initiate the contracting procedure.
At that time you can discuss the option you have selected for contracting.