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<br />c. there are no provisions in the BORROWER'S operating agreement or any state or local
<br />law that 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
<br />CWCB.
<br />
<br />8. Collateral. The collateral for this loan is described in Section 5 (Collateral) of the
<br />Project Summary, and secured by the instrument(s) attached hereto as Appendix 4
<br />and incorporated herein.
<br />
<br />a. The BORROWER shall not sell, convey, assign, grant, transfer, mortgage, pledge,
<br />encumber, or otherwise dispose of the collateral for this loan so long as any of
<br />the principal, accrued interest, and late charges, if any, on this loan remain
<br />unpaid, without the prior written concurrence of the CWCB. In the event of any
<br />such sale, transfer or encumbrance without the CWCB's written concurrence, the
<br />CWCB may at any time thereafter declare all outstanding principal, interest, and
<br />late charges, if any, on this loan immediately due and payable.
<br />
<br />9. Release After Loan Is Repaid. Upon complete repayment to the CWCB of the entire
<br />principal, all accrued interest, and late charges, if any, as specified in the Promissory
<br />Note, theCWCB agrees to release and terminate any and all of the CWCB'sright, title,
<br />and interest in and to the collateral pledged to assure repayment of this loan.
<br />
<br />10. Warranties.
<br />
<br />a. The BORROWER warrants that, by acceptance of the loan under this contract and by
<br />its representations herein, the BORROWER shall be estopped from asserting for any
<br />reason that it is not authorized or obligated to repay the loan to the CWCB as
<br />required by this contract.
<br />
<br />b. The BORROWER warrants that it has not employed or retained any company or
<br />person, other than a bona fide employee working solely for the BORROWER, to
<br />solicit or secure this contract and has not paid or agreed to pay any person,
<br />company, corporation, individual, or firm, other than a bona fide employee, any fee,
<br />cOmmission, percentage, gift, or other consideration contingent upon or resulting
<br />from the award or the making of this contract.
<br />
<br />11. Change of Ownership of Water Shares During Term of Contract. If the interest
<br />rate for this loan is based on the CWCB's agricultural or blended agricultural and
<br />municipal and/or commercial and/or industrial rates, the BORROWER agrees to notify
<br />the CWCB of any change of the ownership of the water rights represented by its
<br />shares from irrigation to municipal or commercial or industrial use. The interest rate
<br />shall be revised when said change in ownership would increase the original interest
<br />rate by 0.5% or more. The parties shall amend this contract, including a revised
<br />promissory note, to effect said change in interest rate.
<br />
<br />12. Remedies For Default. Upon default in the payments to be made by the BORROWER
<br />under this contract, or default in the performance of any covenant or agreement
<br />contained herein, the CWCB, at its option, may:
<br />
<br />a; suspend this contract and withhold further loan disbursements pending corrective
<br />action by the BORROWER, and if the BORROWER does not cure the default as
<br />
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