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, <br />a. the contract has been duly executed by officers of the BoRROVUER who are duly <br />elected or appointed and are authorized to execute the contract and to bind the <br />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 bodies of the <br />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; <br />d. the contract will be valid and binding against the BoRROVVER if entered into by the <br />CWCB; and <br />e. the election held by the Borrower to obtain voter approval of this loan met all <br />requirements of the Colorado Constitution or any other state or local law. <br />8. Pledge of revenues. The BoRROVVER irrevocably pledges to the CWCB, for purposes <br />of repayment of this loan, revenues levied for that purpose as authorized in Appendix 3 <br />and any other funds legally available to the BotzROVVER, in an amount sufficient to pay <br />the annual payment due under this contract ("Pledged Revenues"). Further, the <br />BoRROwER agrees to: <br />a. Segregation of Pledged Revenues. The BoR�ovuER shall set aside and keep the <br />Pledged Revenues in an account separate from other BoRROVUER revenues, and <br />warrants that these revenues will not be used for any other purpose. <br />b. Establish Security Interest. The BORROWER has duly executed a Security <br />Agreement, attached hereto as Appendix 4 and incorporated herein, to provide a <br />security interest to the CWCB in the Pledged Revenues. The CWCB shall have <br />priority over all other competing claims for said revenues, except for the liens of <br />the BoRROVVER's existing loans as listed in Section 5(Schedule of Existing Debt), of <br />the Project Summary, which sets forth the position of the fien created by this <br />contract in relation to any existing lien(s). <br />c. Rate Covenant. Pursuant to its statutory authority and as permitted by law, the <br />BoRROwER shall take all necessary actions consistent therewith during the term of <br />this contract to establish, levy and collec# rates, charges and fees as described in <br />Appendix 3, in amounts sufficient to pay this loan as required by the terms of this <br />contract and the Promissory Note, to cover all expenditures for operation and <br />maintenance and emergency repair services, and to maintain adequate debt <br />service reserves, including obtaining voter approval, if necessary, of increases in <br />the BoRROwER's rate schedule or taxes, if applicable. <br />d. Debt ServFce Reserve Account. To establish and maintain the debt service <br />reserve account, the BoRROVUER shall deposit an amount equal to one-tenth of an <br />annual payment into its debt service reserve fund on the due date of its first annual <br />loan payment and annually thereafter for the first ten years of repayment of this <br />loan. In the event that the BORROWER applies funds from this account to <br />repayment of the loan, the BoRROVV�R shall replenish the account within ninety <br />(90) days of withdrawal of the funds. <br />e. Additional Debts or Bonds. The BoRROwER shall not issue any indebtedness <br />Page 3 of 10 <br />