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Holsinger Law, LLC <br /> lands, wildlife and water law <br /> January 26, 2010 <br /> Mr. Randy Carver,Board President <br /> Montezuma Valley Irrigation Company <br /> 11501 Hwy 491 <br /> P.O. Box 1056 <br /> Cortez Co. 81321 <br /> Re: CWCB Financing for Continued Irrigation System Improvements <br /> Dear Randy: <br /> At its July 2007 meeting the Colorado Water Conservation Board (CWCB) approved a <br /> loan from the Severance Tax Trust Fund Perpetual Base Account to the Montezuma <br /> Valley Irrigation Company (MVIC) in an amount up to $5,292,400 for irrigation system <br /> improvements at an interest rate of 2.25% per annum for a repayment term of 30 years <br /> (CWCB Loan). Collateral for the CWCB Loan, as evidenced in an executed Deed of <br /> Trust was an undivided 100% interest in MVIC's irrigation system improvements <br /> (Collateral). <br /> MVIC and the Dolores Water Conservancy District (DWCD) entered into a Contract in <br /> 1977, which was approved by the United States, "For Adjustment of Water Rights and <br /> Sale of the Use of Irrigation Water." (1977 Contract). The 1977 Contract provided: <br /> Security for Payment. The Company hereby grants to the District a first <br /> lien upon the proceeds of annual and special assessments collected from <br /> the landowners of the Company to the extent necessary to meet the annual <br /> payments due the District under this contract. <br /> 1977 Contract¶ 8. <br /> This provision is subject to several important limitations and cannot be read to prevent <br /> MVIC from receiving financing for irrigation system improvements. <br /> First, the DWCD's lien applies only to, "annual and special assessments collected from <br /> the landowners of the Company." Loan proceeds from the CWCB, or other sources, are <br /> not annual or special assessments collected from the landowners of MVIC. Second, the <br /> lien is limited to, "the extent necessary to meet the annual payments due the DWCD <br /> under this contract." In other words, the amount of the lien is limited to MVIC's annual <br /> Kcot liolsin ,er l:?• <•,:.,:lt.a <br /> I.aura I ('harirand t` Hoer <br /> er <br /> ,lack Silver,0 Counce1 Dcin°r.CO 80203 <br /> P:(303)722-2828 ah Isinugeriaw.corn Holsinger Law,LLC <br /> 1 I.O. 496-102:5 lhc>ising:r(t-tvi corn <br /> v-• w.ilolsineer law.coin jsilvac.°rra�E�t�lsin erl���.ccar <br />