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<br />. <br /> <br />v <br /> <br />e <br /> <br />The last partnership payment is due on September 15, <br />1991 and the last payment on the Deed of Trust is due on <br />October 1, 1991. At that time, the property will be clear of <br />all liens and we should have in excess of $50,000 in <br />reserves. <br /> <br />There is no specific paragraph in the Partnership <br />Agreement whereby the general partner can make capital calls <br />on the limited partners for funds over and above their share <br />contributions. This is not unusual in a limited partnership <br />and is in fact the structure most limited partnerships take <br />so that the individual partners are protected against the <br />debts of the partnership. To raise additional funds from the <br />partners would require a unanimous vote of the shares. <br /> <br />e <br /> <br />I do not see why this should have, as you stated in <br />your letter, "a great bearing" on the approval process. I <br />doubt the Board has ever made a loan that is better <br />collateralized. We are talking about property, dam <br />structures, and water rights that are worth in the millions <br />and a loan that will be for less than $100,000. Conditioning <br />this loan on further pledges of funds from the partners is <br />akin to having a water district's.customers pledge personal <br />assets so that the dist~ict could get a CWCB loan or <br />requiring a rancher to have his friends and relatives cosign <br />the note. <br /> <br />Operating income should increase as we better determine <br />the use(s) of the property. After the Deed of Trust is <br />retired we will have a greater ability to borrow funds and <br />in a worst case scenario sell small sections of the <br />property. The amount of debt to service on this loan is so <br />small compared to our asset value that I can not conceive <br />how a reasonable person would identify this as an area of <br />concern. <br /> <br />e <br /> <br />Your second concern refers to the "cloud" on our water <br />rights. Let me state one more time that there is no "cloud" <br />on our water rights. We have clear title to 95.3% of the <br />Rapid Creek Reservoirs. The case you refer to in your letter <br />does not seek any new use, point of diversion, or additional <br />irrigateable acreage for the reservoir water. In that case, <br />as it pertains to the reservoir water, all we are doing is <br />establiShing with the court what has been the practice on <br />the Lloyd property for over forty years. The Lloyds <br />historically irrigated sufficient acreage on both the Rapid <br />Creek and Tate Creek sides of the property to more then <br />adequately support full use of the reservoir's water. <br />