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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(S) OR ORDINANCE(S) are attached as APPENDIX <br /> 3 and 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 <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 <br /> applicable and binding local law that prevent this CONTRACT from binding the <br /> BORROWER; and <br /> d. the CONTRACT will be valid and binding against the BORROWER if entered into by <br /> the CWCB. <br /> e. the District is a non-taxing district and meets the definition of an enterprise <br /> exempt from TABOR restrictions. <br /> 8. Pledge of revenues. The BORROWER irrevocably pledges to the CWCB, for purposes <br /> of repayment of this loan, the PLEDGED REVENUES as defined in the Loan Resolution, <br /> set forth in APPENDIX 3, in an amount sufficient to pay the annual payment due under <br /> 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. <br /> b. Establish Security Interest. The BORROWER has duly executed a SECURITY <br /> AGREEMENT, attached hereto as APPENDIX 4 and incorporated herein, to <br /> provide a security interest to the CWCB in the PLEDGED REVENUES. The CWCB <br /> shall have priority over all other competing claims for said revenues, except <br /> for the liens of the BORROWER'S existing loans as listed in Section 5 (Schedule <br /> of Existing Debt), of the PROJECT SUMMARY, which sets forth the position of the <br /> lien created by this CONTRACT in relation to any existing lien(s). <br /> Page 3 of 12 <br />