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b. Establish Security Interest. The BORROWER has duly executed a Security Agreement,
<br /> attached hereto as Appendix 4 and incorporated herein, to provide a security interest to
<br /> the CWCB in the Pledged Property. The CWCB shall have priority over all other
<br /> competing claims for said Pledged Property, except for the liens of the BORROWER'S
<br /> existing loans as listed 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 /> any pre-existing lien(s).
<br /> c. Revenue Assessments. Pursuant to its statutoi auth y, ' le 'ncorporation and
<br /> bylaws, the BORROWER shall take all necessa , = 'o s con " e r ith during the
<br /> term of this contract to levy assessments suf °."i t p this lo equired by the
<br /> terms of this contract and the Promissory Note,' o oveenditures for operation
<br /> and maintenance and emergency repair services, Ipir
<br /> ':.n adequate debt
<br /> service reserves. In the event the assessments levied :o-, :WER become
<br /> insufficient to assure such repayment to the CWCB, the BORRO , a l immediately
<br /> take all necessary action consistent with its statutory authority, s 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 /> d. Debt Service Reserve Account. To establish and maintain the debt service reserve
<br /> account, the BORROWER shall deposit an amount equal to one-tenth of an annual
<br /> payment into its debt service reserve fund on the due date of its first annual loan
<br /> payment and annually thereafter for the first ten years of repayment of this loan. In the
<br /> event that the BORROWER applies funds from this account to repayment of the loan,
<br /> the BORROWER shall replenish the account within ninety (90) days of withdrawal of the
<br /> funds.
<br /> 9. Collateral. The collateral for this loan is described in Section 6 (Collateral) of the Project
<br /> Summary, and secured by the instrument(s) attached hereto as Appendix 5 and
<br /> incorporated herein.
<br /> a. The BORROWER shall not sell, convey, assign, grant, transfer, mortgage, pledge,
<br /> encumber, or otherwise dispose of the Collateral for this loan or the Pledged
<br /> Property so long as any of the principal, accrued interest, and late charges, if any, on
<br /> this loan remain unpaid, without the prior written concurrence of the CWCB. In the
<br /> event of any such sale, transfer or encumbrance without the CWCB's written
<br /> concurrence, the CWCB may at any time thereafter declare all outstanding principal,
<br /> interest, and late charges, if any, on this loan immediately due and payable.
<br /> 10. 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 Note,
<br /> the CWCB agrees to release and terminate any and all of the CWCB's right, title, and
<br /> interest in and to the Collateral and the Pledged Property.
<br /> 11. Warranties.
<br /> a. The BORROWER warrants that, by acceptance of the loan 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 /> 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,
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