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<br />immediately take all necessary action consistent with its statutory authority, its articles of
<br />incorporation and bylaws including, but not limited to, levying additional assessments to
<br />raise sufficient revenue to assure repayment of this loan.
<br />
<br />d. Assessments For Operations, Maintenance And Reserves. Pursuant to its statutory
<br />authority, articles of incorporation and bylaws, the BORROWER shall levy assessments in
<br />sufficient amounts to provide funds for adequate operation and maintenance, emergency
<br />repair seNices, and obsolescence and debt seNice reseNes.
<br />
<br />e. Debt Service Reserve Account. To establish and maintain the debt seNice reseNe
<br />account, the BORROWER shall deposit an amount equal to one-tenth of an annual payment
<br />into its debt seNice reseNe fund on the due date of its first annual loan payment and
<br />annually thereafter for the first ten years of this loan. In the event that the BORROWER
<br />applies funds from this account to repayment of the loan, the BORROWER shall replenish
<br />the account within ninety (90) days of withdrawal of the funds.
<br />
<br />7. Collateral, The collateral for this loan is described in Section 4 (Collateral) of the Project
<br />Summary. The BORROWER shall not sell, convey, assign, grant, transfer, mortgage, pledge,
<br />encumber, or otherwise dispose of the collateral for this loan, including the Pledged Property,
<br />so long as any of the principal, accrued interest, and late charges, if any, on this loan remain
<br />unpaid, without the prior written concurrence of the CWCs. In the event of any such sale,
<br />transfer or encumbrance without the CWCB's written concurrence, the CWCB may at any
<br />time thereafter declare all outstanding principal, interest, and late charges, if any, on this loan
<br />immediately due and payable.
<br />
<br />8. Release After Loan Is Repaid, Upon complete repayment to the CWCB of the entire principal,
<br />all accrued interest, and late charges, if any, as specified in the Promissory Note, the CWCB
<br />agrees to release and terminate any and all of the CWCB's right, title, and interest in and to the
<br />collateral and the property pledged to repay this loan.
<br />
<br />9. Warranties.
<br />
<br />a. The BORROWER warrants that, by accepting the loan money under this contract and by its
<br />representations herein, the BORROWER shall be estopped from asserting for any reason
<br />that it is not authorized or obligated to repay the loan to the CWCB as required by this
<br />contract.
<br />
<br />b. The BORROWER warrants that it has not employed or retained any company or person,
<br />other than a bona fide employee working solely for the BORROWER, to solicit or secure this
<br />contract and has not paid or agreed to pay any person, company, corporation, individual,
<br />or firm, other than a bona fide employee, any fee, commission, percentage, gift, or other
<br />consideration contingent upon or resulting from the award or the making of this contract.
<br />
<br />c. The BORROWER warrants that the collateral for this loan is not encumbered by any other
<br />deeds of trust or liens of any party other than the CWCB or in any other manner, except for
<br />any pre-existing Iien(s) identified in Section 5 (Schedule of Existing Debt) of the Project
<br />Summary, which sets forth the position of the lien created by this contract in relation to
<br />that pre-existing lien. Documentation establishing the relative priorities of said liens, if
<br />necessary, is attached to the Project Summary and incorporated herein.
<br />
<br />10. Change of Ownership of Water Shares During Term of Contract. If the interest rate for
<br />this loan is based on the CWCB's agricultural or blended agricultural and municipal and/or
<br />commercial and/or industrial rates, the BORROWER agrees to notify the CWCB of any change
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<br />Loan Contract
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