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<br />,,,," <br /> <br />.. <br /> <br />. <br /> <br />MOSES, WITTEMYER, HARRISON AND WOODRUF'F', P. C. <br /> <br />Daries C. Lile, P.E. <br />May 23, 1994 <br />Page 2 <br /> <br />Higbee, reports to us that for as long as anyone can remember, <br />LAWMA has used the voting method set forth in the By-laws, not the <br />method in the articles. <br /> <br />In the ordinary case, these voting irregularities would raise <br />some concern about the de jure status of the corporations directors <br />and officers and the validity of corporate actions. In the case of <br />LAWMA, however, we do not think that the CWCB should be concerned. <br />All of the members of LAWMA' s current board of directors were <br />chosen by a quorum of the members in unanimous, uncontested <br />elections. Because these election were uncontested, any <br />irregularities in the manner in which the number of votes per <br />member were calculated could have no effect on the outcome of the <br />elections. The law is clear that voting irregularities which do <br />not affect the substantive rights of shareholders do not invalidate <br />an election. See Bvers v. Rollins, 21 P. 894 (Colo. 1889) (despite <br />voting irregularities directors held legally elected because the <br />election results would have been the same had the irregularities <br />not occurred); Chiulli v. Reiter, 515 N.Y.S.2d 547 (A.D. 2 Dept. <br />1987) (voting irregularities immaterial "since the election result <br />would have been the same"); Maqill v. North American Refractories, <br />129 A.2d 411 (Del. 1957) (it is the general rule that an election <br />fairly held should not be set aside for irregularities not <br />affecting the substantive rights of stockholders). <br /> <br />Based on our review of the documents enumerated in the first <br />paragraph of this letter, it is our opinion: <br /> <br />1. That the signature of William Grasmick, President of LAWMA, <br />will make the loan contract valid and binding against LAWMA if <br />entered into by the state. <br /> <br />2. <br /> <br />That there are <br />incorporation or <br />binding LAWMA. <br /> <br />no provisions in LAWMA's articles of <br />bylaws that prevent this contract from <br /> <br />3. That LAWMA's board of directors has the authority to enter <br />into the contract and has approved a resolution authorizing <br />LAWMA to contract for the loan debt. <br /> <br />4. That the "water supply exception" of the Colorado <br />Constitution, Article XI, sections 1 and 6, does not apply to <br />a private non-profit corporation such as LAWMA. <br />