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substantially completed, or, at the STATE discretion, the amount shall be deducted <br />from the final disbursement of loan funds that the STaTE makes to the BoRROwER. <br />b. Final loan amount. In the event that the final Ioan amount is at least 90% of the <br />authorized loan amount, the STaTE shall apply the remaining loan funds to prepayment <br />of the loan. If the remaining funds equal more than 10% of the authorized loan amount, <br />the STaTE may apply those funds to prepayment of the loan with the BORROWER <br />consent, or the parties may execute a contract amendment to reflect the final loan <br />amount. When applying any remaining loan funds to prepayment of the loan, the <br />annual loan payment shall remain unchanged and the time of repayment shall be <br />decreased. <br />7. Warranties. The BoRROVVER warrants the following: <br />a. By acceptance of the loan money pursuant to the terms of this contract and by its <br />representations herein, the BoRROwER shall be estopped from asserting for any reason <br />that the BoRROwER is not authorized or obligated to repay the loan money to the STATE as <br />required by this contract. <br />b. The BoRROwER has full power and authority to enter into this contract. The execution and <br />delivery of this contract and the performance and observation of its terms, conditions and <br />obligations have been duly authorized by all necessary actions of the BoRROVr�R. <br />c. The BoRROwER has not employed or retai <br />fide employee-working solidly for the � <br />BoRROVVER has not paid or agreed t , <br />firm, other than a bona fide employ ,� <br />consideration contingent upon or resulti�g <br />company or person, other than a bona <br />to solicit or secure this contract. The <br />, any, corporation, individual, or <br />'on, percentage, gift, or other <br />! ard or the making of this contract. <br />d. The collateral identified in the Co �Provision of this contract is not encumbered by <br />any other liens or in any other anner, except for any pledge to Denver Water <br />Department. <br />8. Pledge of revenues. For purposes of repayment of this loan, the BORROWER hereby <br />irrevocably pledges to the STATE from its general revenues received each year an amount <br />sufficient to pay the annual loan payment due under this contract and an additional sum <br />each year for the first 10 years, equal to one-tenth of the annual payment, for its reserve <br />debt service fund ("pledged revenues"). The BoRROwER and the STaTE hereby acknowledge <br />that the BoRROVVER also has pledged funds from its general revenues to repay a loan from the <br />Colorado Water Resources and Power Development Authority ("Authority") dated July 13, <br />1998 and that the Authority and the STaTE hold parity liens on such revenues. Further, the <br />BoRROwER agrees to: <br />a. Keep pledged revenues separate. The BORROWER shall set aside and keep the <br />pledged revenues in an account separate from other BoRROwER revenues, and warrants <br />that these revenues will not be used for any other purpose. <br />b. Security interest in pledged revenues. The BoRROwER hereby grants to the STa,TE a <br />security interest in the pledged revenuesto secure the prompt payment of all amounts <br />that may become due under this contract. <br />Chatfield South Water District Page 4 of 11 <br />