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5. Return of Unused Loan Funds. Any loan funds disbursed but not expended for the <br /> PROJECT 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 /> PROJECT or (2) determination by the CWCB that the PROJECT will not be completed. <br /> 6. Borrower's Authority to Contract. The BORROWER warrants that it has full power and <br /> 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'S <br /> AUTHORIZING RESOLUTION(S) OR ORDINANCE(S) are attached as APPENDIX 3 and <br /> incorporated herein. <br /> 7. Bond Counsel's Opinion Letter. Prior to the execution of this CONTRACT by the <br /> CWCB, the BORROWER shall submit to the CWCB a letter from its bond counsel stating <br /> that it is the bond counsel'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 BORROWER was formed and is operated and maintained as a water activity <br /> enterprise pursuant to Article 45.1, Title 37, C.R.S. and within the meaning of <br /> COLORADO CONST. Art. X, Section 20. <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 /> Loan Contract C150356 <br /> Page 3 of 12 <br />