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the performance and observation of its terms, conditions and obligations have been <br /> duly authorized by all necessary actions of the BORROWER. The BORROWER'S <br /> AUTHORIZING RESOLUTION(S) OR ORDINANCE(S) are attached as APPENDIX 3 and <br /> incorporated herein. <br /> 7. Attorney's Opinion Letter. Prior to the execution of this CONTRACT by the CWCB, the <br /> BORROWER shall submit to the CWCB a letter from its bond counsel stating that it is the <br /> attorney's opinion that <br /> a. the CONTRACT has been duly executed by officers of the BORROWER who are duly <br /> elected or appointed and are authorized to execute the CONTRACT and to bind the <br /> BORROWER; and <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; and <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; 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 BORROWER 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 BORROWER, 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 BORROWER shall set aside and keep the <br /> PLEDGED REVENUES in an account separate from other BORROWER 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 BORROWER'S existing loans as listed in Section 5 (Schedule of Existing Debt), of <br /> the PROJECT SUMMARY, which sets forth the position of the lien created by this <br /> CONTRACT in relation to any existing lien(s). <br /> c. Debt Service Reserve Account. To establish and maintain the debt service <br /> reserve account, the BORROWER 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 BORROWER shall replenish the account within ninety <br /> (90) days of withdrawal of the funds. <br /> Loan Contract C150364 <br /> Page 3 of 11 <br />