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7. Attorneys' 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 bond <br /> counsel's opinion that: <br /> a. the resolution or ordinances of the BORROWER authorizing the execution and delivery of <br /> the CONTRACT were duly adopted by the governing bodies of the BORROWER; and <br /> b. the CONTRACT will be valid and binding against the BORROWER if entered into by the <br /> CWCB; and <br /> In addition to the foregoing opinion of bond counsel, prior to execution of this CONTRACT by the <br /> CWCB, the BORROWER shall submit to the CWCB a letter from its general counsel stating that <br /> it is the general 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. there are no provisions in the Colorado Constitution or any other state or local law that <br /> prevent this CONTRACT from binding the BORROWER. <br /> 8. Pledge of revenues. The BORROWER irrevocably pledges to the CWCB, for purposes of <br /> repayment of this loan, the PLEDGED REVENUES as defined in the Loan Resolution set forth in <br /> APPENDIX 3 and any other funds legally available to the BORROWER, in an amount sufficient to <br /> pay the annual payment due under this CONTRACT. <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 warrants <br /> 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 priority <br /> over all other competing claims for said revenues, except for the liens of the <br /> BORROWER'S existing loans as listed in Section 5 (Schedule of Existing Debt), of the <br /> PROJECT SUMMARY, which sets forth the position of the lien created by this CONTRACT in <br /> 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 this <br /> CONTRACT to establish, levy and collect 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 service <br /> reserves, including obtaining voter approval, if necessary, of increases in the <br /> BORROWER'S rate schedule or taxes, if applicable. <br /> d. Debt Service Reserve Account or Fund. To establish and maintain the debt service <br /> reserve account or fund, the BORROWER shall deposit an amount equal to one-tenth of <br /> an annual payment into its debt service reserve account or fund on the due date of its <br /> first annual loan payment and annually thereafter for the first ten years of repayment of <br /> this 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 (90) <br /> days of withdrawal of the funds. The debt service reserve account or fund requirement <br /> Loan Contract C150410B <br /> Page 3 of 12 <br />