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<br />. <br /> <br />. <br /> <br />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 eWCB for the loan. The STATE shall <br />calculate the amount of the interest that accrued pfior 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 /> <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 /> <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 tefms, conditions and obligations have been duly <br />authorized by all necessary actions of the BORROWER, The Borrower's authorizing <br />resolution(s) or ofdinance(s) are attached as Appendix 3 and incorporated herein. <br /> <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 /> <br />a. the contract will be duly executed by officers of the BORROWER who are duly elected Of <br />appoitlled and are authofized to execute the contract and to bind the BORROWER; <br /> <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 /> <br />c. there are no provisions in the Colorado Constitution or any other state Of local law that <br />prevent this contract from binding the BORROWER; and <br /> <br />d. the contract will be valid and binding against the BORROWER if entered into by the STATE. <br /> <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 Revenue Bonds, Series 1994, <br />with which this loan has parity status, and its existing eWCB loans. Further, the BORROWER <br />agrees to. <br /> <br />a. Keep pledged revenues separate. The BORROWER shall set aside and keep the pledged <br />revenues in an account separate from other BORROWER revenues, and wafrants that <br />these revenues will not be used for any other purpose. <br /> <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 fOf <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 /> <br />c. Rate Covenant. Pursuant to its statutory authofity 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 /> <br /> <br />Page 2 of 11 <br /> <br />-- <br />