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r <br />South San Joaquin Irrigation District <br />RE: Memorandum of Agreement <br />Page 2 of 3 <br />- A replacement instrument of collateralization must be <br />delivered to State Fund at least thirty (30) days prior <br />to the expiration of the existing instrument of <br />collateralization. If this condition is not met, State <br />Fund may demand payment in cash of all principal and <br />interest earned. <br />- Interest is to be earned in an amount which shall be not <br />less than the sum of the interest computed in accordance <br />with the following: <br />The interest for the policy period shall be the product <br />of the applicable rate of interest and the average <br />premium owed, where the average premium owed shall be <br />taken as the lesser of the following two amounts: <br />508 of the sum of the deposit premium not collected <br />in cash and the largest amount of premium owed <br />during the policy period, or <br />The sum of the premium owed at the beginning of each <br />monthly period the policy remained in force divided <br />by the total number of such monthly periods; and <br />The interest for each period following the expiration <br />of the policy during which the premium owed and the <br />rate of interest applicable remain unchanged shall be <br />the product of the applicable rate of interest, the <br />premium owed, and T; where T = the number of days <br />during which the premium owed and the rate of interest <br />applicable remained unchanged, divided by three hundred <br />and sixty-five (365). <br />- The obligation to collect interest in cash is <br />unconditional and any representation to the contrary is <br />unlawful. <br />- Monthly payments are as indicated on the attached . <br />schedule of payments and are due and payable 10 days <br />after receipt of bill. <br />In the event of cancellation of this policy prior to <br />completing the policy period, this agreement will be null <br />and void. All deferred premium, and any accrued <br />interest, will be due and payable in cash on the <br />effective date of cancellation. <br />STATE INSURANI <br />ON <br />■ CE RUNED <br />1275 MARKET STREET • SAN FRANCISCO, CALIFORNIA 94103 <br />n n 1, no <br />