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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 <br /> CWCB within 30 calendar days from notification from the CWCB of either (1) <br /> completion of the PROJECT or (2) determination by the CWCB that the PROJECT will not <br /> be completed. Any such loan funds so remitted to CWCB shall be applied to the <br /> payment of amounts due on the LOAN. <br /> 6. Borrower's Authority to Contract. The BORROWER warrants that it has full power <br /> and authority to enter into this CONTRACT. The execution and delivery of this <br /> CONTRACT and the performance and observation of its terms, conditions and <br /> obligations have been duly authorized by all necessary actions of the BORROWER. The <br /> BORROWER'S AUTHORIZING RESOLUTION is attached as APPENDIX 3 and incorporated <br /> 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 <br /> duly elected or appointed and are authorized to execute the CONTRACT and to <br /> bind the 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 <br /> law that prevent this CONTRACT from binding the BORROWER; and <br /> d. it is a water activity enterprise in accordance with C.R.S. §§37-45.1-101 et <br /> seq. for the purposes of acquiring, constructing, operating and maintaining <br /> hydropower plants. <br /> e. the CONTRACT will be valid and binding against the BORROWER if entered into by <br /> the CWCB. <br /> 8. Pledged of Revenues. The BORROWER irrevocably pledges to the CWCB, for <br /> purposes of repayment of this LOAN, the PLEDGED REVENUES as defined in the Loan <br /> Resolution set forth in APPENDIX 3, in an amount sufficient to pay the annual payment <br /> due under this CONTRACT. <br /> a. Segregation of Pledged Revenues. The BORROWER shall set aside and keep <br /> the PLEDGED REVENUES in an account separate from other BORROWER <br /> revenues and warrants that these revenues will not be used for any other <br /> purpose; provided however, whenever (but only so long as) Borrower holds <br /> PLEDGED REVENUES in all funds and accounts pledged to the payment of the <br /> principal of and interest on the LOAN in an amount equal to or greater than the <br /> sum of three (3) annual payments to the CWCB, then all PLEDGED REVENUES in <br /> excess of such sum, as received by Borrower, shall be released automatically <br /> Page 3 of 13 <br />