CT2015-091 Attorney Opinion Letter

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Colorado Water Conservation Board September 11, 2014 Page 2 (d) the Deed of Trust given by the Company,intended to be given to the Public Trustee of Conejos County, Colorado, to secure the payment of the above-referenced promissory note. However, from an examination of the copy thereof as furnished to this office, it is noted that Rio Grande County is set forth as the county in which the real estate is located. This is,undoubtedly, a typographical error in that the real property as therein described is, indeed, located in Conejos County. A correction should be made before the deed of trust is placed of record with the Clerk and Recorder of Conejos County, Colorado. (e) the Security Agreement issued by the Board to further secure the payment of the above- described promissory note. (f) the Resolutions of the Shareholders of The Sanford Canal Company adopted at a Shareholder's meeting concerning the Loan Contract, stating further that such Resolution are,once adopted, irrepealable during the term of the loan. Based on the foregoing, it is my professional opinion that: (1) The Company is a non-profit corporation duly organized on July 23, 1892,and existing under and by virtue of the laws of the State of Colorado for the purpose of owning and acquiring water and water rights, ditches and ditch rights-of-way and easements, diversions and diversion structures, including all appurtenances used in connection with the access and operation of said Company. An inquiry of the Colorado Secretary of State Office disclosed that the Company was incorporated having perpetual existence,and there was nothing to indicate that the Company is not in good standing with the Colorado Secretary of State. (2) The By-laws of the Company in Article IV, Section 3 currently in effect sets forth that all stock of the Company is assessable,pro rata,when it is deemed necessary to raise funds to keep its ditches, canals, and other works in good repair, provided such question or assessment is first submitted to the stockholders at a regular meeting or special meeting called for that purpose, and a majority of the stock issued and outstanding shall vote in favor of such assessment. It is my professional opinion that this particularly Section of the Company's by-law is the authorization needed for the purpose of the transaction contemplated by the Loan Contract. (3) The Company has the full legal right and authority to carry on the business of the Company as defined in the Loan Contract as currently being conducted and as proposed to be conducted, and to undertake the Project as defined in the Loan Contract. (4) The proceedings of the Company authorizing the Board to undertake and complete the Project as defined in the Loan Contract were duly and lawfully adopted and approved in accordance