CT2015-164 Ownership and Breach emails 6/10/15

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6✓11/2015 ..er+ State.co.us Executive Branch Mail-Re:REVISED Amendl CWCB Loan Contract-Two Rivers • • STATE OF EMAIL FROM CWCB TO arei COLORADO Mason - DP BORROWER IN REGARD TO OWNERSHIP AND CONTRACT BREACH Re: REVISED Amend1 CWCB Loan Contract-Two Rive 6/10/15 1 message Mason - DNR, Peg <peg.mason @state.co.us> Wed, Jun 10, 2015 at 8:57 AM To: Nicole Nies <nnies @hcnwf-law.com> Cc: Wayne Harding <WHarding @2riverswater.com>, Teresa Staples <tstaples @hcnwf-law.com> Wayne and Nicole- There seems to be complete confusion in regard to the pledged property for the CWCB Loan Contract. Please see attached title search (page 2), provided by you originally, that indicates that TRWC was the owner of the pledged property at that time. Also attached is the Warranty Deed (Ownership of Property), submitted by you, indicating that Two Rivers owned the property in 2011 prior to the 2012 execution of the CWCB Loan Contract. Attached with the Warranty Deed is the Quitclaim Deed showing that only limited sections of each parcel was transferred to GrowCo, Inc. If the following entities are different wholly-owned subsidiaries of your company: GrowCo, Inc., GrowCo Partners 1 LLC, GrowCo Partners 2 and Grow Co, and the transfers occurred after the CWCB Loan Contract was signed then you are in breach of the contract. Please see following language from contract: Collateral During Loan Repayment. The BORROWER shall not sell, convey, assign, grant, transfer, mortgage, pledge, encumber, or otherwise dispose of the COLLATERAL or the PLEDGED PROPERTY so long as any of the principal, accrued interest, and late charges, if any, on this loan remain unpaid, without the prior written concurrence of the CWCB. In the event of any such sale, transfer or encumbrance without the CWCB's written concurrence,the CWCB may at any time thereafter declare all outstanding principal, interest, and late charges, if any, on this loan immediately due and payable. I will need to discuss this with the State Controller's Delegate who may decide to send it to the Attorney General's Office for legal review. Any deeds you have that indicate a transfer of the pledged property should be submitted at this time. Any information that you can provide to help clear up this issue would be appreciated. Thank you, Peg Mason Contracts Manager DNR COLORADO CO Colorado Water .' Conservation Board Department of Natural Resources Office:303-866-3441 ext.3227 1313 Sherman St., Room, 718, Denver, CO 80203 peg.mason(astate.co.us On Tue, Jun 9, 2015 at 5:31 PM, Nicole Nies <nnies @ hcnwf-law.com> wrote: So, we don't need to encumber Parcel 1, as the purpose for this is the release of that parcel. We need deeds of trust from GCP 2, LLC and GrowCo, Inc. This now requires us to include GCP 2 LLC as a party to the loan contract and to our opinion letter, as it is now a grantor or collateral for the loan. https://mai I.google.com/mail/u/1/?ui=2&ik=30a2528dad&view=pt&q=whardi ng%402riverswater.com&qs=true&search=query&th=14dddfa5131545b1&siml=14d... 1/4