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<br />. <br />,. .../,r <br />,J <br /> <br />. <br /> <br />. <br /> <br />Mr. N. C. Ioannides <br />September 24, 1986 <br />Page 2 <br /> <br />holders be conducted to approve the contract. Under <br />Colorado corporation law, a board of directors has author- <br />ity to bind a corporation to contract for indebtedness <br />without the approval of its stockholders unless such <br />authority is limited or prohibited by the corporation's <br />articles or bylaws. Our inspection of the articles and <br />bylaws discloses no such limitation or prohibition. <br /> <br />4. There are no provisions in the entity's code or <br />charter that would prevent the executed contract from <br />binding the Stewart Ditch and Reservoir Company. We know <br />of no laws that would prevent the contract from binding <br />the entity. <br /> <br />5. The contract will be valid and binding against the <br />Stewart Ditch and Reservoir Company if it is entered into <br />by the State of Colorado. <br /> <br />Please note that I did take the liberty of striking one <br />word at the top line of page 4 of the contract before signatures <br />were placed upon it by the Stewart Ditch President and Secretary. <br />By striking the word "principal" I believe that the contract more <br />clearly states that the amount of $559,488.00 being called for is <br />not the "principal" amount but rather the entire amount to be re- <br />paid by the Stewart Ditch and Reservoir Company including interest. <br />The principal amount of the obligation is $240,000.00. <br /> <br />If you have any questions about any aspect of my letter <br />or the enclosures, please let me know. Thank you very much for <br />your consideration. <br /> <br />Very truly yours, <br /> <br />BROWN AND BROVJN <br /> <br /> <br />....u-~c... <br />tte <br /> <br />t1Sjpc <br /> <br />Enclosures <br /> <br />P.S. Please note that I have modified the contract to correct the <br />name of the company from Stewart Ditch and Irrigation Company to <br />Stewart Ditch and Reservoir Company. <br />