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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. Any <br /> such loan funds so remitted to CWCB shall be applied to the principal payment of amounts <br /> due on the Loan. <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 duly <br /> authorized by all necessary actions of the BORROWER. The BORROWER'S AUTHORIZING <br /> RESOLUTION (LOAN RESOLUTION) OR ORDINANCE is attached as APPENDIX 4 and <br /> incorporated herein. <br /> 7. Bond Counsel's Opinion Letter. Prior to the execution of this CONTRACT by the CWCB, <br /> the BORROWER shall submit to the CWCB a letter from its bond counsel stating that it is <br /> 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 delivery <br /> of the 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 <br /> and binding local law 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 subject to typical limitations related to bankruptcy, police power, and creditor's <br /> rights generally; and <br /> e. the BORROWER was formed and is operated as a water activity enterprise pursuant to <br /> the provisions of C.R.S. 37-45.1-101 and is a government-owned business authorized <br /> to issue its own revenue bonds and receiving fewer than 10% of annual revenue in <br /> grants from all Colorado state and local governments combined within the meaning of <br /> Article X, Section 20 of the Colorado Constitution. <br /> f. based upon the parity certificate, the Water Activity Enterprise revenues, as reflected <br /> in the Water Enterprise Fund (which funds accounts for the financial activities of the <br /> Water Activity Enterprise,) are sufficient to enable the District to execute the <br /> Promissory Note under the Loan Agreement. <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 <br /> in APPENDIX 4 and any other funds legally available to the BORROWER, in an amount <br /> sufficient to 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 <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 5 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 with respect to the PLEDGED REVENUES, <br /> Page 3 of 12 <br />