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<br />. <br /> <br />. <br /> <br />David W. Walker <br />July 22, 1991 <br />Page Three <br /> <br />to secure payment of those loans, Fruita promised to convey title <br />to portions of its water system to CWCB; in 1983, Fruita agreed to <br />merge its water system with the Ute Water water system; Ute Water <br />desires to have Fruita's system transferred to ute Water free and <br />clear of any claim to the system by CWCB; and CWCB is willing to <br />release its claim to the water system if Fruita pledged its future <br />sales tax revenues as security for the loans. By incorporating the <br />ordinance into the Contract Amendments by reference, these <br />provisions of the ordinance became a part of the Contract <br />Amendments. The law relating to incorporation by reference is set <br />forth in 17A Am.Jur. 2d, Contracts, ~400: <br /> <br />other writings, or matters contained therein, which are <br />referred to in a written contract may be regarded as <br />incorporated by the reference as a part of the contract and <br />therefore, may properly be considered in the construction of <br />the contract. Where a written contract refers to another <br />instrument and makes the terms and conditions of such <br />instrument a part of it, the two will be construed together as <br />the agreement of the parties. <br /> <br />Accordingly, by making Fruita's ordinance a part of the Contract <br />Amendments which it drafted, CWCB incorporated the terms and <br />conditions of Fruita's ordinance into the Contract Amendments. <br /> <br />As discussed above, the Contract Amendments do not expressly <br />modify Paragraph B of the original Contracts. However, Paragraph <br />5 'of the Contract Amendments provide that in the event of any <br />conflict, inconsistency, variance, and incongruity between the <br />provisions of the Contract Amendments and the original Contracts, <br />the provisions of the Contract Amendments will govern. The <br />provisions of Attachment C, which are a part of the Contract <br />Amendments, are inconsistent and incongruous with Paragraph B of <br />the original Contracts. Accordingly, pursuant to Paragraph 5 of <br />the Contract Amendments, the provisions of Attachment C, setting <br />forth intent of the parties that the sales tax revenues would be <br />substituted as security for the water system, control over the <br />provisions of Paragraph B of the original Contracts. This <br />conclusion is further strengthened by the fact that the Contract <br />Amendments were prepared by CWCB, so, according to well established <br />contract construction principles, any ambiguities in the contract <br />Amendments will be construed against CWCB. <br />