PROJ00063

• Contract/PO #: C153533
• Contractor Name: Santa Maria Reservoir Company
• Contract Type: Loan
• Water District: 0
• County: Hinsdale
• Bill Number: SB 88-30
• Loan Projects - Doc Type: Contract Documents

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CARLSON. HAMMOND & PADDOCK. L.L.C.
ATTORN EYS AT LAW

MARY MEAD HAM MONO
WILLIAM A. PADDOCK
LEE H. ..JOHNSON
MELANIE KOPPERUD BACKES
PETER C. FLEMING
K. GWEN BEACHAM

1700 LINCOLN STREET, SUITE 3900
DENVER, COLORADO 80203-4539

JOHN UNDEM CARLSON
(1940-1992)

TELEPHONE [phone]
TELECOPIER [phone]

September 18, 1995

RECEIVED
SEP 1 8 1995

Ms. Jan Illian
Contract Administrator
Colorado Water Conservation Board
721 Centennial Building
1313 Sherman Street
Denver, Colorado 80203

Colorado Water
Conservation Board

Re: Contract No. C153533-Amendment No. One

Dear Jan:

Thank you for sending me the amendment to Contract No. C153533
to address the deferral of one year's loan payment granted in 1994.
I have reviewed the amendment to the Contract and have forwarded it
to the Santa Maria Reservoir Company (the "Company") for its review
and approval.

In connection with your correspondence, you pointed out that
a Deed of Trust had not been given as required by the original
Contract. I have reviewed our files and find no record of a Deed
of Trust previously have been given to the State of Colorado. The
Company has no record of having done so either. Accordingly, I
have reviewed the proposed form of Deed of Trust which you provided
and would like to request a number of modifications. I enclose
your original diskette with the original Deed of Trust. On that
diskette is also a revision to the Deed of Trust (DEED-aT. REV) with
my suggested changes. In addition, I enclose a redlined copy of
the Deed of Trust (DEED-OT.RED) showing the specific language
changed. In the original Contract there was no promissory note
required or given. For that reason, I have deleted all references
to a promissory note in the Deed of Trust, and have replaced them
with references to the Contract. That is the change which most
frequently occurs in the Deed of Trust. Second, interest on the
funds began to run from the date of first disbursement of the funds
under the Contract, not from the date of the Contract or of this
Deed of Trust. I have changed the second paragraph of the Deed of
Trust to reflect this fact.

The Contract was negotiated with the State of Colorado,
Department of Natural Resources, Water Conservation Board. There
was no provision for assignment of the Contract by the State, and
there was no provision for an assignable promissory note as part of
the Contract. At the time of contracting, the Company believed and
intended that its financial obligation would be to the State of