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• • <br /> 6. Borrower's Authority to Contract. The BORROWER warrants that it has full power and authority to <br /> enter into this CONTRACT. The execution and delivery of this CONTRACT and the performance and <br /> observation of its terms, conditions and obligations have been duly authorized by all necessary <br /> actions of the BORROWER. The BORROWER'S AUTHORIZING RESOLUTION (LOAN RESOLUTION) is <br /> attached as APPENDIX 3 and incorporated herein. <br /> 7. Bond Counsel'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 bond <br /> counsel's opinion that: <br /> a. the CONTRACT has been duly executed by officers of the BORROWER who are duly elected or <br /> appointed and are authorized to execute the CONTRACT and to bind the BORROWER; and <br /> b. the resolutions or ordinances of the BORROWER authorizing the execution and delivery of the <br /> CONTRACT were duly adopted by the governing bodies of the BORROWER; and <br /> c. there are no provisions in the Colorado Constitution or any other state or applicable and <br /> binding local law that prevent this CONTRACT from binding the BORROWER; and <br /> d. the System is a government-owned business authorized to issue its own revenue bonds <br /> and receiving under 10% of annual revenue in grants from all Colorado state and local <br /> governments combined within the meaning of Article X, Section 20 of the Colorado <br /> Constitution. <br /> e. the CONTRACT will be valid and binding against the BORROWER if entered into by the CWCB. <br /> 8. Pledge of revenues. The BORROWER irrevocably pledges to the CWCB,for purposes of repayment <br /> of this loan, the PLEDGED REVENUES as defined in the Loan Resolution set forth in APPENDIX 3 and <br /> any other funds legally available to the BORROWER, in an amount sufficient to pay the annual <br /> payment due under this CONTRACT. <br /> a. Segregation of Pledged Revenues. The BORROWER shall set aside and keep the PLEDGED <br /> REVENUES. in an account separate from other BORROWER revenues and warrants that these <br /> revenues will not be used for any other purpose. <br /> b. Establish Security Interest. The BORROWER has duly executed a SECURITY AGREEMENT, <br /> attached hereto as APPENDIX 4 and incorporated herein, to provide a security interest to the <br /> CWCB in the PLEDGED REVENUES. The CWCB shall have priority over all other competing <br /> claims for said revenues, except for the liens of the BORROWER'S existing loans as listed in <br /> Section 5 (Schedule of Existing Debt), of the PROJECT SUMMARY, which sets forth the <br /> position of the lien created by this CONTRACT in relation to any existing lien(s). <br /> c. Rate Covenant. Pursuant to its statutory authority and as permitted by law, the BORROWER <br /> shall take all necessary actions consistent therewith during the term of this CONTRACT to <br /> establish, levy and collect rates, charges and fees as described in APPENDIX 3, in amounts <br /> sufficient to pay this loan as required by the terms of this CONTRACT and the PROMISSORY <br /> NOTE, to cover all expenditures for operation and maintenance and emergency repair <br /> services, and to maintain adequate debt service reserves, including obtaining voter <br /> approval, if necessary, of increases in the BORROWER'S rate schedule or taxes, if <br /> applicable. <br /> Loan Contract C150411D <br /> Page 3 of 12 <br />