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revenue to assure repayment of this loan.
<br /> d. Assessment Covenant. Pursuant to its statutory authority and as permitted by
<br /> law, the BORROWER shall take all necessary actions consistent therewith during
<br /> the term of this CONTRACT to establish, levy and collect rates, charges and fees
<br /> as described in APPENDIX 3, in amounts sufficient to pay this loan as required by
<br /> the terms of this CONTRACT and the PROMISSORY NOTE, to cover all expenditures
<br /> for operation and maintenance and emergency repair services, and to maintain
<br /> adequate debt service reserves, including obtaining voter approval, if necessary,
<br /> of increases in the BORROWER'S rate schedule or taxes, if applicable.
<br /> e. Debt Service Reserve Account or Fund. To establish and maintain the debt
<br /> service reserve account, the BORROWER shall deposit an amount equal to one-
<br /> tenth of an annual payment into its debt service reserve fund on the due date of its
<br /> first annual loan payment and annually thereafter for the first ten years of
<br /> repayment of this loan. In the event that the BORROWER applies funds from this
<br /> account to repayment of the loan, the BORROWER shall replenish the account
<br /> within ninety (90) days of withdrawal of the funds. The debt service reserve
<br /> account or fund requirement will remain in effect until the loan is paid in full.
<br /> 9. Collateral The BORROWER irrevocably pledges to the CWCB, for purposes of
<br /> repayment of this loan, the real property ("COLLATERAL") as further described in
<br /> Section 6 (COLLATERAL) of the PROJECT SUMMARY, authorized by the BORROWER'S
<br /> AUTHORIZING RESOLUTIONS and secured by the DEED OF TRUST(APPENDIX 5).
<br /> 10. Collateral during Loan Repayment. The BORROWER shall not sell, convey, assign,
<br /> grant, transfer, mortgage, pledge, encumber, or otherwise dispose of the COLLATERAL
<br /> so long as any of the principal, accrued interest, and late charges, if any, on this loan
<br /> remain 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 late
<br /> charges, if any, on this loan immediately due and payable.
<br /> 11. 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, the CWCB agrees to release and terminate any and all of the CWCB's right,
<br /> title, and interest in and to the Collateral and the Pledged Property.
<br /> 12. Warranties.
<br /> a. The BORROWER warrants that, by acceptance of the loan under this CONTRACT
<br /> and by its representations herein, the BORROWER shall be estopped from
<br /> asserting for any reason that it is not authorized or obligated to repay the loan to
<br /> the CWCB as required by this CONTRACT.
<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
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