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elected or appointed and are authorized to execute the contract and to bind the <br />BORROWER; <br />b. the resolutions of the BORROWER authorizing the execution and delivery of the <br />contract were duly adopted by the BORROWER's board of directors and /or <br />stockholders <br />c. there are no provisions in the BORROWER's articles of incorporation or bylaws or any <br />state or 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. <br />8. Pledge Of Property. The BORROWER irrevocably pledges to the CWCB for purposes of <br />repayment of this loan: (1) revenues from assessments levied for that purpose as <br />authorized by the BORROWER's resolution(s) and (2) all of the BORROWER's rights to <br />receive said assessment revenues, hereinafter collectively referred to as the "Pledged <br />Property." <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 4 and incorporated herein, to provide a <br />security interest to the CWCB in the Pledged Property. The CWCB shall have <br />priority over all other competing claims for said Pledged Property, except for the <br />liens of the BORROWER's existing loans as listed in Section 5 (Schedule of Existing <br />Debt) of the Project. Summary, which sets forth the position of the lien created by <br />this contract in relation to any existing lien(s). <br />c. Revenue Assessments. Pursuant to its statutory authority, articles of incorporation <br />and bylaws, the BORROWER shall take all necessary actions consistent therewith <br />during the term of this contract to levy assessments sufficient to pay this loan as <br />required by the terms of this contract and the Promissory Note, to cover all <br />expenditures for operation and maintenance and emergency repair services, and to <br />maintain adequate debt service reserves. In the event the assessments levied by <br />the BORROWER become insufficient to assure such repayment to the CWCB, the <br />BORROWER shall immediately take all necessary action consistent with its statutory <br />authority, its articles of incorporation and bylaws including, but not limited to, levying <br />additional assessments to raise sufficient revenue to assure repayment of this loan. <br />d. Debt Service Reserve Account. To establish and maintain the debt service <br />reserve account, the BORROWER shall deposit an amount equal to one -tenth of an <br />annual payment into its debt service reserve fund on the due date of its first annual <br />loan payment and annually thereafter for the first ten years of repayment of this <br />loan. In, the event that the BORROWER applies funds from this account to <br />repayment of the loan, the BORROWER shall replenish the account within ninety <br />(90) days of withdrawal of the funds. <br />9. Collateral. The collateral for this loan is described in Section 6 (Collateral) of the <br />Page 3 of 10 <br />