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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 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 this <br /> 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 REVENUES and PLEDGED PROPERTY for this <br /> loan are not encumbered by any other deeds of trust or liens of any party other than the <br /> CWCB or in any other manner, except for the EXISTING PARITY LOANS which sets forth the <br /> position of the lien created by this CONTRACT in relation to any existing lien(s). <br /> Documentation establishing the relative priorities of said liens, if necessary, is attached to <br /> the PROJECT SUMMARY and 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 <br /> irrigation to municipal or commercial or industrial use. The interest rate shall be <br /> revised when said change in ownership would increase the original interest rate by o.5% <br /> or more. The parties shall amend this CONTRACT including a revised PROMISSORY NOTE, to <br /> effect said change in interest rate. <br /> 14. Operation of PROJECT.The BORROWER shall,without expense or legal liability to the CWCB, <br /> manage, operate, and maintain the PROJECT continuously in an efficient and economical <br /> manner. <br /> 15. 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 herein, <br /> the CWCB, at its option, may: <br /> a. suspend this CONTRACT and withhold further loan disbursements pending <br /> corrective action by the BORROWER, and if the BORROWER does not cure the default as <br /> provided for below, permanently cease loan disbursements and deem the PROJECT <br /> substantially 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 <br /> limited to, the PROMISSORY NOTE, SECURITY AGREEMENT, and/or any instrument securing <br /> Page 9 of i6 <br />