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r . <br />the amount of the interest that accrued up to Payment Initiation Date (as referred to in <br />the Promissory Note). Payment Initiation Date shall occur within 120 calendar days <br />following disbursement of the total principal amount of the loan, but no later than the <br />Contract Finish (as referred to in Section 10 of the Project Summary) which is four (4) <br />years from the date this contract is signed by the State Controller, and shall be <br />established by agreement between the parties hereto. The BoRROwER shall repay <br />that amount to the CWCB either within ten (10) days from the date of notification from <br />the CWCB, or, at the CWCB's discretion, said interest shall be deducted from the final <br />disbursement of loan funds that the CWCB makes to the BoRROwER. <br />4. Return of Unused Loan Funds. Any loan funds disbursed but not expended for the <br />PRO�ECT in accordance with the terms of this contract shall be remitted to the CWCB <br />within 30 calendar days from notification from the CWCB of either (1) completion of the <br />PRO�ECT or (2) upon the determination by the CWCB that the PRO�ECT will not be <br />completed. <br />5. BORROWER Authority To Contract. The BORROWER Wafl'aC1tS that It h8S fUll pOWel' <br />and authority to enter into this contract. The execution and delivery of this contract and <br />the performance and observation of its terms, conditions and obligations have been <br />duly authorized by all necessary actions of the BORROWER. The BORROWER <br />authorizing resolution(s) or ordinance(s) are attached as Appendix 3 and incorporated <br />herein. <br />6. Attorney's Opinion Letter. Prior to the execution of this contract by the CWCB, the <br />BoRROwER shall submit to the CWCB letters from its general counsel (for Paragraph <br />6.a) and from its bond counsel (for Paragraphs 6.b though 6.d) stating that it is the <br />attomeys' opinion that <br />a. the contract will be duly executed by officers of the BoRROwER who are duly elected <br />or appointed and are authorized to execute the contract and to bind the BoRROwER; <br />b. the resolutions or ordinances of the BORROWER authorizing the execution and <br />delivery of the contract were duly adopted by the governing body of the BoRROwER; <br />c. there are no provisions in the Colorado Constitution or any other state or local law <br />that prevent this contract from binding the BoRROwER; and <br />d. the contract will be valid and binding against the BoRROwER if entered into by the <br />CWCB. <br />7. Pledge of revenues. The BoRROwER irrevocably pledges to the CWCB, for purposes of <br />repayment of this loan, the revenues collected, after deduction for operation and maintenance <br />expenses, for that purpose as authorized in Appendix 3 which include (1) revenues, income, <br />rents and receipts earned by the BORROWER from or attributable to the ownership and <br />operation of the BORROWER water and sanitary sewer system (System), (2) the proceeds of <br />any insurance covering business interruption loss relating to the System in excess of or not <br />applied to the repair and replacement of the System, (3) proceeds of any sale, conveyance, <br />or exchange of the System in excess of that applied to replace the System sold or <br />exchanged, (4) interest earned on any moneys or investments that are required to be paid <br />into any fund or account pledged to the payment of this loan, and (5) any other funds legally <br />available to the BoRROwER, in an amount sufficient to pay the annual payment due under this <br />contract ("Pledged Revenues"). Further, the BoRROwER agrees to: <br />a. Segregation of Pledged Revenues. The BoRROwER shall set aside and keep the <br />Page 2 of 10 <br />