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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 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 required <br /> by this CONTRACT. <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 <br /> this CONTRACT and has not paid or agreed to pay any person, company, corporation, <br /> individual, or firm, other than a bona fide employee, any fee, commission, percentage, <br /> gift, or other consideration contingent upon or resulting from the award or the making of <br /> this CONTRACT. <br /> C. The BORROWER warrants that the Pledged Property and Collateral for this loan are not <br /> encumbered by any other deeds of trust or liens of any party other than the CWCB or <br /> in any other manner, except for any existing lien(s) identified in Section 5 (Schedule of <br /> Existing Debt) of the PROJECT SUMMARY, which sets forth the position of the lien created <br /> by this CONTRACT in relation to any existing lien(s). Documentation establishing the <br /> relative priorities of said liens, if necessary, is attached to the PROJECT SUMMARY and <br /> incorporated herein. <br /> 13. Change of Ownership of Water Shares during Term of Contract. If the interest rate <br /> for this loan is based on the CWCB's agricultural or blended agricultural and municipal <br /> and/or commercial and/or industrial rates, the BORROWER agrees to notify the CWCB of <br /> any change of the ownership of the water rights represented by its shares from irrigation <br /> to municipal or commercial or industrial use. The interest rate shall be revised when said <br /> change in ownership would increase the original interest rate by 0.5% or more. The <br /> parties shall amend this CONTRACT including a revised PROMISSORY NOTE, to effect said <br /> change in interest rate. <br /> 14. Remedies for Default. Upon default in the payments to be made by the BORROWER under <br /> this CONTRACT, or default in the performance of any covenant or agreement contained <br /> herein, the CWCB, at its option, may: <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 provided for <br /> below, permanently cease loan disbursements and deem the PROJECT substantially <br /> complete; <br /> b. declare the entire principal amount, accrued interest, and late charges, if any, then <br /> outstanding immediately due and payable; <br /> c. exercise its rights under any appendices to this CONTRACT, including, but not limited to, <br /> the PROMISSORY NOTE, SECURITY AGREEMENT, and/or any instrument securing collateral; <br /> and <br /> d. take any other appropriate action. <br /> Page 5 of 12 <br />