Académique Documents
Professionnel Documents
Culture Documents
Plaintiff,
VS.
Defendants.
Motion"), filed by Plaintiff Stonetown Animas Lender, LLC (hereafter "Stonetown") by and
through its attorneys Modrall Sperling Roehl Harris & Sisk, P.A. (Spencer L. Edelman). Based
upon the Verified Motion and the stipulation to the receivership of Defendants AV Water Co.,
LLC and Animas Valley Land & Water Co., LLC, the Court is sufficiently advised in the
1. Stonetown filed its Complaint for Debt and Money Due, Foreclosure, and
1379626.1
2. The real and personal property that is the subject of the Verified Motion is located
3. Because the real and personal property that is the subject of the Verified Motion is
located in San Juan County, New Mexico, venue is proper in this Court.
principal amount of $5,700,000.00 and payable to the order of Stonetown (the "Note")
8. As security under the Loan Agreement for payment and satisfaction of the Note
and Secured Obligations (as defined in the "Borrower Mortgage" referenced below), AV Water,
Financing Statement and Assignment of Leases and Rents dated December 5, 2014 (hereafter
"Borrower Mortgage"), covering certain real property and improvements, personal property, and
fixtures located in San Juan County, New Mexico, and defined in part in sections 1.6, 1.7, and
1.8 (and referenced exhibits) of the Borrower Mortgage (referred to herein as the "Water
Property").
9. Animas Valley Land & Water Co., LLC ("AVLW"), an affiliate of AV Water, as
additional security for the loan evidenced by the Note, executed and delivered to Stonetown a
Mortgage, Security Agreement, Financing Statement, and Assignment of Leases and Rents dared
December 5, 2014 (the "AVLW Mortgage"), covering certain real property and other property
interests in San Juan County, New Mexico, and defined in part in Sections 1.6, 1.7 and 1.8. (and
referenced exhibits) of the AVLW Mortgage (the "AVLW Property"). AVLW also joined in the
10. As security for payment and satisfaction of the Note and Secured Obligations, AV
Water, through the Borrower Mortgage in Article 8 thereof, also assigned Rents and Tenant
Leases (as defined in the Borrower Mortgage and referred to herein as the "Water Rents") to
Stonetown. Water Rents specifically include Water Revenues, as defined in the Loan
Agreement, which Water Revenues are derived from Water Service Operations, as defined in the
11. On December 5, 2014, the Borrower Mortgage was recorded in the real estate
No. 201413654, and the AVLW Mortgage was recorded on December 5, 2014, in the real estate
records for San Juan County, New Mexico, in Book1580, Page963, as Document
No. 201413653.
12. In order to further perfect Stonetowns security interest in the Water Property, on
December S, 2014, a UCC Financing Statement (the "AV Water Fixture Statement") was
recorded in the real estate records of San Juan County, New Mexico in Book 1580 Page 966 as
13. In order to further perfect Stonetowns security interest in the Water Property, on
December 8, 2014, a UCC Financing Statement (the "AV Water UCC") was filed with the
15. Stonetown holds a perfected mortgage lien against and security interest in the
immediately effective transfer of the right to Water Rents, as collateral for the Note and Secured
Obligations.
17. AV Water was, under the terms of the Borrower Mortgage, granted a license
(hereafter "License") pursuant to which AV Water was allowed to collect Water Rents and to use
said proceeds upon certain terms and conditions, and which is revocable by Stonetown upon the
18. Stonetown has revoked the License pursuant to the Borrower Mortgage based on
19. The Borrower Mortgage provides that, upon an Event of Default, Stonetown has
the right to appoint a receiver to operate the Water Property and collect the Water Rents.
20. An Event of Default has occurred by AV Waters failure to make payment in full
21. Under the terms of the Borrower Mortgage and AVLW Mortgage, because of the
Event of Default, AV Water and AVLW have agreed to the appointment of a receiver, and
further stipulated to the appointment of a receiver following the filing of the Verified Motion.
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1.1. C. Randel Lewis, whose address is 1600 Wynkoop St., Suite 200, Denver, CO
Property as defined in Section 1.2. The Receivers duty to act as receiver is subject to the written
1.2. "Receivership Property" means the Water Property and the Water Rents, and
also any parcels within the AVLW Property that incorporate or constitute the location of fixtures,
equipment, improvements, or other property items within the Water Property or necessary for or
utilized within the Water Service Operations, but specifically excludes certain assets within the
Water Property and Water Rents which pertain solely to or are derived solely from the Harvest
Gold water system (other than water rights) and which are being released of record by Stonetown
from the lien of the Borrower Mortgage on or about the date hereof. A non-exclusive list of the
Receivership Property is attached hereto as Exhibit A. The Receivership Property in any event
encompasses all Water Property and Water Rents relating in any respect to the Morningstar
water system and Water Service Operations therefor (sometimes herein the "Momingstar Water
Service Operations").
1.3. Upon entry of this Order (the "Effective Date"), the Receiver is authorized and
directed to take immediate possession and full control of the Receivership Property and to take
such other actions as the Receiver deems reasonable or appropriate to take possession of, to
exercise full control over, to prevent waste, and to preserve, manage, secure, and safeguard the
Receivership Property.
1.4. From and after the Effective Date, the Receiver shall take possession of and
receive any income belonging to or arising from the operation of the Receivership Property. The
Receiver is empowered to open or close any accounts with respect to such funds. The Receiver
shall deposit monies and funds collected and received in connection with the Receivership
Property at federally-insured banking institutions or savings associations with offices in the State
of New Mexico, which are not parties to this case. The Receiver shall manage the Receivership
Property in accordance with the laws and regulations of the State of New Mexico, including,
1.5. AV Water and AVLW and their agents, employees and contractors are ordered to
cooperate with Stonetown and the Receiver in the transition of the management of the
Receivership Property to the Receiver and on the Effective Date turn over to the Receiver or
make available on-site all of the following pertaining to the Receivership Property (but only to
the extent that such items are in their possession, custody, or control or situated on the Water
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Receivership Property and all off-site financial records related to the income, and
operation and management of the Receivership Property;
(t) Such other records pertaining to the management of the Receivership Property as may be
reasonably requested by the Receiver;
(u) All cash proceeds from the Receivership Property;
(v) Chart of Accounts (list of bank accounts);
(w) Bank statements of above accounts;
(x) Customer lists;
(y) Any and all warranties associated with the property or equipment or provided to or for
the benefit of the property or equipment utilized in the operations and/or maintenance of
the Receivership Property; All warranty information, including but not limited to,
booklets, descriptions, registrations or any other materials evidencing, describing, or
related to any warranty provided to or of benefit to the property or any fixtures,
equipment, or any other items utilized in the operation or maintenance of the
Receivership Property;
(z) All documentation related to work performed on the Receivership Property, including
any amounts owed to any contractors or subcontractors;
(aa) All documentation of any and all insurance claims filed within the past three years.
1.6. Borrower and its employees, agents and contractors are prohibited from removing
any personal property belonging to Borrower or used or usable in the Morningstar Water Service
Operations from the premises, or diverting any income, revenues, deposits, or other cash receipts
or cash balances.
1.7. Borrower shall fully cooperate with the Receiver advising the Receiver of any
Receivership Property in compliance with New Mexico law and regulations and the terms of the
Borrower Mortgage and as applicable the AVLW Mortgage, unless any such insurance
Receiver may keep the existing insurance coverage in full force and effect and, in such case, the
Receiver (and Stonetown, to the extent that Stonetown is not already named as an additional
insured or loss payee) shall be named as an additional insured or loss payee, as applicable.
Alternatively, the Receiver may cancel the existing insurance coverage (with any cancellation or
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termination fee belonging to the receivership estate) and obtain new insurance coverage (casualty
and/or general liability) that complies with the terms of the Borrower Mortgage and as applicable
the AVLW Mortgage, and Stonetown and Borrower (and AVLW as applicable) shall be named
Borrower and any of its employees, agents or contractors are prohibited from canceling,
reducing, or modifying any and allinsurance coverage in existence with respect to the
Receivership Property.
the Receivership Property to provide Momingstar Water Service Operations and the
administration and enforcement of Stonetowns rights under the Loan Documents (as defined in
the Borrower Mortgage), including but not limited to, the preservation and management of the
Receivership Property, including the inspection and evaluation of such property, improving
Morningstar Water Service Operations, billing customers, collecting amounts owed, and, to the
extent necessary, reorganizing the Receivership Property and its management. The Receiver
shall have the authority to manage and supervise any remediation that Stonetown authorizes or
the State of New Mexico mandates, and manage and account for any such remediation, should
Stonetown so authorize, but shall have no duty to do so unless and until Stonetown authorizes
2.2. The Receiver shall be vested with and shall discharge the following authority,
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(t) To obtain, review and analyze the past records, including without limitation accounting
records, disbursements, banking records, plans, specifications, engineering reports, soil
reports, permits, entitlements, and any other books and documents necessary to determine
whether there are any potential claims or rights against the other persons and entities
arising out of the ownership and operation of the corporation, or otherwise perform the
duties of the Receiver;
(u) To pay prior obligations incurred by the AV Water, its agents and servants, or any other
person or entity charged with the responsibility of maintaining and operating the
Receivership Property, if such obligations are deemed by the Receiver to be necessary or
advisable for the continued operation of the Receivership Property, and any
improvements thereto;
(v) To use receipts from the Receivership Property and such funds as may be advanced by
third parties or by the Stonetown for the payment of expenses of the Receivership and of
the Receivership Property;
(w) Generally to do such other lawful acts as the Receiver reasonably deems necessary to the
effective operation and management of the Receivership Property, and to perform such
other functions and duties as may from time to time be required and authorized by this
Court, by the laws of the State of New Mexico or by the laws of the United States of
America;
(x) To advertise the Receivership Property for sale;
(y) To file such documents as are required by the Public Regulation Commission;
(z) To inspect and evaluate the Receivership Property, to determine what remediation might
be appropriate, if any, and to manage and supervise any resulting work or efforts relating
to the inspection and remediation of the Receivership Property.
3.1. Subject to the approval of both (1) Stonetown, by written consent either directly
by Stonetown or by its counsel, AND (2) by a specific "Order of Approval" from this Court, the
Receiver is authorized, but not required, to carry out the following powers and duties:
3.2. Subject to the approval of either (1) Stonetown, by written consent either directly
by Stonetown or by its counsel, OR (2) by a specific "Order of Approval" from this Court, the
Receiver is authorized, but not required, to carry out the following powers and duties.
(a) To enforce, modify, renegotiate, or terminate any existing service, management, or other
contracts relating to the operations of the Receivership Property, execute new service,
management, or other contracts relating to the operations of the Receivership Property,
engage contractors and skilled trades on a competitive bid basis to complete
improvements to the Receivership Property and/or to maintain the Receivership Property,
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and to execute such contracts for such purposes as the Receiver deems appropriate,
provided that such contract for services exceeds the aggregate amount of $5,000.00; and
(b) To borrow funds for purposes relating to the operation of the Receivership Property,
provided, however that the Receiver shall not borrow funds without first providing
Stonetown, by advance written notice, a reasonable opporttmity to elect to advance funds
required by the Receiver. Nothing in this provision shall prevent Stonetown from making
protective advances under the terms of the Borrower Mortgage or AVLW Mortgage or
other Loan Documents.
4.1. Although the Receiver shall have possession and control of the Receivership
Property, the Receiver shall not take title to the Receivership Property, but shall have the power
and authority to transfer title to the Receivership Property or portions thereof pursuant to this
exercise all powers and authority generally available under the laws of the State of New Mexico
that may be incidental to the powers described in this Order or reasonably necessary to
accomplish the purpose of this Receivership. The Receiver shall have such additional powers
that are provided by law and that the Court may from time to time direct or confer. The Receiver
shall undertake any actions lawfully required by the New Mexico Public Regulation Commission
(the "PRC") and operate utility assets in compliance with the New Mexico Public Utility Act and
all PRC rules, regulations and orders that are lawfully applicable to the receivership.
4.3. The Receiver shall not take any action in carrying out the duties contained in
this Order that impedes or interferes with Stonetowns rights to foreclose pursuant to the
Borrower Mortgage or AVLW Mortgage, and shall fully cooperate with the marketing efforts, if
pursue any and all other rights, claims, causes of action or remedies which Stonetown may have
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without any further order and no such further order of this Court shall be needed or required for
4.5. The Receiver shall, during the pendency of this action, have the right to apply
4.6. The authority granted to the Receiver is self-executing, unless the action
requires approval under the terms of this Order. Unless the action requires approval, the
Receiver is authorized to act on behalf of the Receivership Property or in the Receivers name
without further order of this Court and without personal recourse against the Receiver (but
4.7. All advances to the Receiver by or on behalf of Stonetown for the benefit of
the Receivership Property, and any other costs and expenses incurred by the Receiver under this
Order, shall be deemed protective advances under the Borrower Mortgage and as applicable the
AVLW Mortgage. Any such protective advances shall be fully secured by Stonetowns first
priority mortgage lien and security interest against the Receivership Property and shall become
4.8. The Receiver may hire and retain and otherwise obtain the advice and
assistance of legal counsel and accounting or other professionals as may be necessary to perform
the Receivers duties, with all related expenses deemed to be expenses of the Receivership
4.9. The Receiver is authorized to apply the Water Rents collected in connection
with the management and operation of the Receivership Property as follows: fast, to the
Receivers compensation as ordered below; second, to the other costs and expenses of the
Receivership, including any management fees, professionals fees, and other out of pocket
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expenses incurred by the Receiver in connection with the Receivership; third, to costs of
operating, maintaining, and repairing the Receivership Property; fourth, to payment of expenses
of the Receivership Property, including but not limited to real and personal property taxes,
insurance, and assessments; fifth, to repay all sums borrowed by the Receiver and evidenced by
Receivers Certificates; sixth, to make principal or interest payments toward the debt owed
Stonetown.
4.10. The Receiver shall not be liable for the actions of third parties not taken in
accordance with the directions of Receiver, or the terms of this Order, unless due to the wrongful
conduct of Receiver (as set forth in Section 9.3 below), but then only for any damages directly
5.2. The Receivers compensation shall be paid (1) first from the income from the
Receivership Property, and (2)next, by Stonetown, but only to the extent that the income is
insufficient to pay the Receivers compensation. The Receiver is authorized to issue Receivers
5.3. Nothing in this Order shall require the Receiver to advance funds other than
from income without a bond or security for payment satisfactory to the Receiver.
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5.4. Within 45 days of the Effective Date the Receiver shall submit to Stonetown
5.5. By the 20th day of each calendar month, the Receiver shall prepare a financial
report (including, without limitation, an income and expense statement, a balance sheet and a
cash flow analysis) on a monthly basis pertaining to the operations of the Receivership Property
during the prior month ("Receivers Report"). The Receiver may submit the Receivers Report
to the Court, for the courts in camera inspection except that Receiver shall provide copies of
such reports to Stonetowns counsel and AV Waters counsel (or designated representative). The
Receivers Reports are not to be filed with the Clerk at the Court and shall not be available for
5.6. Notwithstanding anything herein to the contrary, Receiver and its counsel, if
any, shall provide copies of pleadings, any correspondence, and reports prepared for Receiver
both to Stonetowns counsel and to AV Waters counsel (or designated representative). The
Receiver shall furnish to the parties counsel (or designated representative) any additional
requested by them, but the Receiver is authorized to request instructions from the Court should
any party request information or documents which would be unduly burdensome or expensive to
5.7. The Receiver shall furnish the Receivers Reports to the following:
and
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Spencer L. Edelman
Modrall Sperling Roeld Harris & Sisk, P.A.
500 Fourth St. NW, Suite 1000
Albuquerque, New Mexico 87102
E-mail: spencer.edelman@modrall.com
5.8. Absent further order of this Court, the Receiver shall not be required to post a
6. AV Waters Duties.
6.1. Deliver immediately over to the Receiver or its agents all Receivership
Property described above, including, without limitation, all of AV Waters equipment, general
limited liability company books and records, documents, chattel paper, deposit and all other
accounts, and letter-of-credit rights (as such terms are defined in the UCC); together with (i) all
substitutions and replacements for and products of any of the foregoing; (ii) proceeds of any and
all of the foregoing; (iii) in the case of all tangible goods, all accessions; and (iv) all accessories,
attachments, parts, equipment and repairs now or hereafter attached or affixed to or used in
connection with any tangible goods whether now owned or hereafter acquired, and all other
things of value relating to the Receivership Property (including without limitations all funds on
deposit in all bank accounts of AV Water and such records and other papers in its possession or
under its control as may be pertinent to the status of the Receivership Property and the
Receivers collection and liquidation thereof); properly endorsed to the Receiver when
necessary;
the Receivership Property, including accounts receivable, other collections, books and other
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records relating to the operation, maintenance and management of the corporation or the
Receivership Property, and to permit the Receiver to carry out his duties hereunder without
interference;
6.3. Disclose to the Receiver any assets of AV Water which AV Water believes
are not a part of the Receivership Property subject to the provisions of this Order;
(a) Collecting income from the Receivership Property, or any proceeds, revenues, accounts,
issues, profits or other revenues thereof;
(b) Withdrawing funds from any bank or other depository account belonging to the
Receivership Estate;
(c) Terminating or causing to be terminated any license, permit, lease contract, or agreement
relating to the Receivership Property; and
(d) Otherwise interfering with the operation of the Receivership Property or the Receivers
discharge of his duties.
7. Confidentiali ,ty.
.... 7.1. "Confidential Information" means the Receivers Reports and any other non-
public information.
7.2. The parties to this action, their counsel (or designated representative), and all
those in active concert or participation with them, who receive actual notice of this Order, shall
keep all Confidential Information provided by the Receiver confidential, and all such persons are
prohibited from disclosing any Confidential Information to anyone other than the parties to this
action and their counsel (or designated representative) without specific order of this Court,
except that Stonetown or AV Water and their attorneys and agents may provide potential
purchasers, consultants, attorneys, potential lenders, or any other appropriate persons with
information useful for the marketing, leasing, selling or management of the Receivership
Property. ~:
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8. Term and Final Aeeountinm
8.1. This Receivership shall continue until (i) further order of the Court; or (ii) the
foreclosure of the Borrower Mortgage and as applicable the AVLW Mortgage for all of the
Receivership Property and the expiration of any applicable redemption period; or (iii) the sale or
8.2. The Receiver can further be removed either (i) automatically 30 days after
filing with the Court written demand for removal signed by Stonetowns counsel; or (ii) in the
Courts equitable discretion upon a motion for cause filed by Stonetown or AV Water. If the
Receiver shall turn over to the purchaser at foreclosure sale or its designee (including any
property manager) all of the Receivership Property unless otherwise ordered by the Court. The
Receiver shall turn over the Receivership Property to the AV Water immediately upon a
statutory redemption from a foreclosure sale of the Property. The Receiver shall turn over the
transaction between Stonetown and AV Water, and the Receivership shall terminate accordingly.
8.4. Neither the termination of the Receivership nor the Receivers removal or
8.5. The Receiver shall submit a fmal accounting for approval by the Court within
30 days after the termination of the Receivership, or the Receivers removal or resignation.
8.6. Only after the Court approves the Receivers final accounting may the
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8.7. In the event of a foreclosure sale, the Receivership shall immediately
terminate upon redemption and pay-off in full of the debt owed to Stonetown or if all of the
9. General Provisions.
9.1. No person or entity shall file suit against the Receiver, take other action
against the Receiver, or execute against any of the Receivership Property, without an order of
this Court permitting the suit or action, provided, however, that no prior court order is required to
file a motion in this action to enforce the provisions of this Order or any other order of this Court
in this action, and provided further, that the foregoing is subject to and qualified by Section 11.1
below.
9.2. The Receiver and its employees, agents, and attorneys shall have no personal
liability in connection with any liabilities, obligations, liens, or amounts owed to any of AV
Waters creditors because of its duties as Receiver. Nothing in this Order shall grant any rights
to trade creditors or general unsecured creditors, whose rights shall be solely determined in
9.3. The Receiver and its employees, agents, and attorneys shall have no personal
liability, and they shall have no claim asserted against them relating to the Receivers duties
under this Order, except for claims due to the gross negligence, gross or willful misconduct,
malicious acts, fraud, and/or the failure to comply with the Courts orders.
9.4. AV Water, and all those in active participation or concert with it who receive
notice of this Order, and all those having claims against the Receivership Property who receive
notice of this Order, are enjoined from, and shall not until the Receivership is terminated:
(a) Commit Waste. Commit any waste on all or any part of the Receivership Property, or
commit any act on all or any part of the Receivership Property in violation of law, or
remove, transfer, encumber or otherwise dispose of any of the Receivership Property.
(b) Collect Income. Demand, collect, receive, discount, or in any other way divert or use
any of the income, revenues, deposits, or other cash receipts or cash balances.
(c) Terminate any Utility Service. Terminate or withhold any electric, gas, water, sewer,
telephone, or other utility service supplying the Receivership Property, require any utility
deposit or otherwise interfere with the continued operations of the Receivership Property.
(d) Interfere with the Receiver. Directly or indirectly interfere in any manner with the
discharge of the Receivers duties under this Order or the Receivers possession of and
operation or management of the Receivership Property, except AV Water shall have the
right to move the Court to remove Receiver for cause, subject to notice to the Receiver
and Stonetown and a hearing held by the Court to ~consider such motion.
(e) Impair the Preservation of the Receivership Property. Do any act which will, or
which will tend to materially impair, defeat, divert, prevent, or prejudice the preservation
of the Receivership Property, including the income, or the preservation of Stonetowns
interest in the Receivership Property and the income.
9.6. The Receivers duty to act as Receiver is subject to the Receivers written
acceptance and approval of the terms of this order. Upon acceptance, the Receiver shall be
bound by each and every term contained in this Order and each and every obligation of the
10.1. This Order may be amended or supplemented for cause after a motion or
hearing. This Order may also be amended or supplemented by order agreed to by Stonetown,
11.1. This Order shall not limit, prejudice or eliminate Stonetowns right to pursue
any and all other or separate remedies at law or under the Borrower Mortgage, AVLW
Mortgage, Note, or other Loan Documents between the parties, including, but not limited to
foreclosure of the Borrower Mortgage or AVLW Mortgage or any other action by Stonetown
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under any contract, security agreement, or the Uniform Commercial Code with respect to any of
11.2. This Order shall not prejudice, impair or act as collateral estoppel, res
judicata, or law of the case in connection with any other claim or defense of AV Water or
Hon.(Day .
District Judge
Submitted:
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EXHIBIT A
(a) Star Heights Water Tank #1, 7 County Road 3146, San Juan County, New
Mexico, as shown on the Plat of said Subdivision filed for record July 14, 1994 in Book
1186, page 126 of the Records (as defined below) of said County.
AND
Star Heights Water Tank #2, 32 County Road 3143, San Juan County, New Mexico
Lot 11, in Block 4 of the STAR HEIGHTS SUBDWISION, San Juan County, New
Mexico, as shown on the Plat of said Subdivision filed for record July 14, 1994 in Book
1186, page 126 of the Records of said County;
(b) Leasehold interests under Water Facility Ground Lease dated as of April 23,
2008, between Southwest Property Management Company, as lessor, and AVLW, as
lessee, as evidenced by a Memorandum of Lease recorded in the San Juan County, New
Mexico real property records (the "Records") on April 25, 2008, at Book 1474, Page 654,
Reception No. 200806516, and as assigned by AVLW to AV Water by an instrument
recorded in the Records on June 28, 2011 at Book 1527, Page 274, Reception No.
201107623, demising that certain real property described on Schedule 1 attached hereto;
(c) Any parcels of the AVLW Property, as legally described on the AVLW
Mortgage, which incorporate or on which are located fixtures, equipment, improvements,
or other property items within the Water Property pertaining to the Momingstar water
system or necessary for or utilized within Water Service Operations for the Momingstar
water system, and specifically including, without limitation, Lot 97 of Momingstar
Ranches Subdivision No. 3, San Juan County, New Mexico, as shown on the Plat of said
Subdivision filed for record September 11, 1997, at Book 1245, Page 793, on which is
located certain water pump equipment and systems for Morningstar Water Service
Operations;
(d) Leasehold interests and option purchase fights under Lease with Option to
Purchase made between AVLW, as the landlord, and AV Water, as the tenant, for that
certain real property described as Schedule 2 attached hereto, and recorded in the Records
on December 5, 2014, at Book 1580, Page 956, Document No. 201413646, and any
greater interests hereafter acquired by AV Water in such real property;
(e) Together with the following in relation to the foregoing tracts:
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(i) All buildings, structures, and improvements now or hereafter located on
such tract or tracts, as well as all rights-of-way, easements, and other
appurtenances thereto;
(ii) All right, title and interest in any land lying between the boundaries of
such tract or tracts and the center line of any adjacent street, road, avenue, or
alley, whether opened, proposed or vacated;
(iii) All of the rents, income, receipts, revenues, issues and profits of and from
such tract or tracts and improvements, whether such rents, income, receipts,
revenues, issues or profits are attributable to any period, or are collected, prior to
or subsequent to any Event of Default, and specifically including, without
limitation, all Rents (as defined in the Borrower Mortgage and AVLW Mortgage),
including all Water Rents and Water Revenues, related to the Momingstar water
system;
(iv) All right, title and interest in and to any and all water and water rights on,
underlying, appurtenant to, or solely benefitting or associated with such tracts or
any portion thereof or benefitting or associated with the Water Service Operations
(separately from and in addition to the "Operational Water Rights" referenced
herein), including, without limitation, any additional water and water rights
employed for the Momingstar or Harvest Gold water systems, and located or
deemed located within San Juan County, New Mexico, and specifically including,
without limitation, any water wells or well rights, and any licenses, permits and
approvals that may be issued for the beneficial use and enjoyment of such water
and water rights and wells and well rights;
(v) All minerals, crops, timber, trees, shrubs, flowers, and landscaping
features now or hereafter located on, under or above such tract or tracts;
(vi) All machinery, apparatus, equipment, fittings, fixtures (whether actually or
constructively attached, and including all business and trade fixtures) now or
hereafter located in, upon, or under such tracts or improvements and used or
usable in connection with the Water Service Operations for the Momingstar water
system, and any other present or future operation thereof, including but not
limited to all heating, air-conditioning, freezing, lighting, incinerating, power, and
water treatment, water filtration, water pumping, water storage and water
distribution facilities and equipment (including, without limitation, fire hydrants,
meters, filters, submarines, tanks, piping, and pumps), engines; pipes; pumps;
tanks; motors; conduits; switchboards; plumbing, lifting, cleaning, fire prevention,
fire extinguishing, refrigerating, ventilating, and communications apparatus;
boilers, water heaters, ranges, furnaces, and burners; appliances; vacuum cleaning
systems; elevators; escalators; shades; awnings; screens; storm doors and
windows; stoves; refrigerators; attached cabinets; partitions; ducts and
compressors; rugs and carpets; draperies; and all additions thereto and
replacements therefor;
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(vii) All development rights associated with such tract or tracts, including
without limitation, any previously or subsequently transferred to such tract or
tracts from other real property or now or hereafter susceptible of transfer from
such tract or tracts to other real property, and all governmental licenses, permits
or authorizations or approvals with respect to such tract or tracts; and
(viii) All awards and payments, including interest thereon, resulting from the
exercise of any right of eminent domain or any other public or private taking of,
casualty or injury to, or decrease in the value of, any of such property, including
without limitation all insurance payments and proceeds relating to such property;
o All water rights defined as the "Operational Water Rights" and conveyed to AV Water by
the closing of the "Water Purchase Agreement" (as both terms are defined in the
Borrower Mortgage) pursuant to the deed recorded in San Juan County, New Mexico, on
April 25, 2016, at Book 1600, Page 975, Document No. 201604663;
All water line, distribution and other water service easements and other real property
interests held by AV Water from and after December 5, 2014, whether in fee or as
easements, licenses, leases or in any other form, situated in the County of San Juan, State
of New Mexico, and used or usable in connection with the Water Service Operations for
the Momingstar water system, including all such easements whether recorded or
unrecorded, established in gross or appurtenant to any other portion of the Water Property
pertaining to the Momingstar water system, lying in public rights of way or on other
property, and arising from express grant or reservation or by implication or prescription,
and further specifically including, without limitation, those easements described on
Schedule 3 attached hereto and incorporated herein by this reference;
o All other and greater rights and interests of every nature in the property and property
interests set forth above within the Receivership Estate for the Morningstar water system,
and in the possession or use thereof and income therefrom, whether now owned or
subsequently acquired, including, without limitation, any fee ownership acquired in any
properties described as leasehold estates; and
All Chattels, Intangible Personalty and Collateral as defined in Sections 1.7, 1.8 and 2.2,
respectively, of the Borrower Mortgage that pertain to the Momingstar water system, and
specifically including, without limitation, all accounts and receivables associated with
Water Revenues derived from Water Service Operations for the Momingstar water
system, and further together with any Tenant Leases (as described in the Borrower
Mortgage and AVLW Mortgage) related to any of the foregoing interests within the
Receivership Estate for the Momingstar water system.
24
SCHEDULE 1
A tract of land situate in the West One-Half of the East One-Half (W/2E/2) of Section 32,
Township 30 North, Range 12 West, N.M.P.M., San Juan County, New Mexico, and being
20 feet on either side of the following described centerline:
BEGINNING at a point on the North fight-of-way line of County Road #33 which lies
505.00 feet North 0001635 East and 371.00 feet North 5800923 East from the South
One-Quarter Comer of said Section 32, said point lying on an 8-inch pipeline;
THENCE North 1403930 East 712.95 feet along said pipeline;
THENCE North 0005026 East 1396.10 along said pipeline to the end of line.
25
SCHEDULE 2
The Southeast Quarter of the Northeast Quarter of the Southeast Quarter (SE/4 NE/4 SE/4) of
Section Four (4) in Township Twenty-Nine (29) North of Range Twelve (12) West, San Juan
County, New Mexico, N.M.P.M.
1379626.1
SCHEDULE 3
Easement and other rights under that certain Water Facility and Pipeline Easement
Agreement dated as of April 23, 2008, made between Southwest Property Management
Company, as the grantor, and AVLW, as the grantee, and recorded in the Records as of
April 25, 2008, at Book 1474, Page 656, Reception No. 200806518, as assigned by
AVLW to AV Water by an instrument recorded in the Records on December 5, 2014, at
Book 1580, Page 959, Document No. 201413649.
Easement rights under that certain Easement Agreement dated as of November 7, 2008,
made among AVLW, Momingstar Domestic Water and Wastewater Users Association,
and Maureen G. Wright, Trustee of the Maureen G. Wright Revocable Trust under Trust
Agreement dated October 18, 1976, as amended, and recorded in the Records on
December 9, 2008, at Book 1486, Page 38, Reception No. 200818322, as assigned by
AVLW to AV Water by instrument recorded in the Records on December 5, 2014, at
Book 1580, Page 957, Document No. 201413647.
Grant of Easement by Dewey K. Foutz, Sr., and Laurie J. Foutz, Trustees of the Foutz
Family Trust dated December 9, 1992, and recorded in the Records on December 24,
1997, at Book 1251, Page 53, Reception No. 9719376, as assigned by AVLW to AV
Water by instrument recorded in the Records on December 5, 2014, at Book 1580, Page
957, Document No. 201413647.
Easement grants in the Records in favor of Momingstar Domestic Water and Wastewater
Users Association (a/k/a Morningstar Domestic Water Users Association) and/or
Momingstar Water Users Association, any rights of AVLW therein having been assigned
to AV Water by instrument recorded in the Records on December 5, 2014, at Book 1580,
Page 957, Document No. 201413647.
1379626.1