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2. Interest Prior to Project Completion. As the loan funds are disbursed by the STATE to the <br /> BORROWER, interest shall accrue at the rate set by the CWCB for the loan. The STATE shall <br /> calculate the amount of the interest that accrued prior to completion of the Project and the <br /> BORROWER shall repay that amount to the STATE either within ten (10) days after the date the <br /> STATE determines that the PROJECT has been substantially completed, or, at the STATE'S <br /> discretion, said interest shall be deducted from the final disbursement of loan funds that the <br /> STATE makes to the BORROWER. <br /> 3. Return of Unused Loan Funds. Any STATE funds not expended for the PROJECT in <br /> accordance with the terms of this Contract shall be remitted to the STATE within 30 days of <br /> either (1) completion of the PROJECT or (2) upon the determination by the STATE that the <br /> PROJECT will not be completed. <br /> 4. 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 the <br /> 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(s) or ordinance(s) are attached as Appendix 3 and incorporated herein. <br /> 5. Attorney's Opinion Letter. Prior to the execution of this contract by the STATE, the <br /> BORROWER shall submit to the STATE an opinion from its counsel stating that it is the attorney's <br /> opinion that <br /> a. the contract will be 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; <br /> b. the resolutions of the BORROWER authorizing the execution and delivery of the contract <br /> were duly adopted by the governing bodies of the BORROWER; <br /> c. there are no provisions in the Colorado Constitution or any other state or local law that <br /> 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 STATE. <br /> 6. Pledge of revenues. The BORROWER hereby irrevocably pledges to the STATE, for purposes <br /> of repayment of this loan, water system revenues levied for that purpose as authorized by its <br /> resolutions, and any other funds legally available to the BORROWER, in an amount sufficient to <br /> pay the annual payment due under this contract ("pledged revenues"), subject only to the <br /> BORROWER'S pledges of funds for the repayment of its Sewer <br /> svi p BVI, eries 1994, <br /> with which this loan has parity status, and its existing CWCB to . : l r h ORROWER <br /> agrees to: <br /> a. Keep pledged revenues separate.pThe BORROWER Va t a { kee th ledged <br /> revenues in an account separate from other BORR eve s .arjd arr is that <br /> these revenues will not be used for any other purpose. �'' ''' -.r .. '1,,,,, s <br /> b. Security interest in pledged revenues. To provide a security interest to the STATE in the <br /> pledged revenues so that the STATE shall have priority over all other competing claims for <br /> said revenues, (except for the liens of the BORROWER'S existing loans as shown in <br /> Schedule of Existing Debt (Section 2) of the Project Summary,) the BORROWER has duly <br /> executed a Security Agreement, attached hereto as Appendix 4 and incorporated herein. <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 water rates, charges and fees in amounts sufficient <br /> Page 2 of 11 <br />