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<br />'..T'., <br /> <br />repayment of the loans as required by the terms of this Contract, <br />the Borrower shall immediately take all necessary actions, <br />including but not limited to making such modifications to the rate <br />schedule as the Borrower deems necessary to efficiently and <br />economically raise sufficient revenue to assure repayment of the <br />project loans to the State and to provide for the financial <br />requirements for participation in the Project. <br /> <br />The Borrower agrees that pursuant to its statutory <br />authority, it shall adjust its revenues from water user charges and <br />fees from time to time as necessary and at the request of the State <br />to provide for adequate management, operation and maintenance, <br />emergency repair services, obsolescence reserves of the Project, <br />and to assure its ability to make repayment of the loans under this <br />Contract. <br /> <br />10. The Borrower warrants that in the event of a default <br />by the Borrower in the repayment of its obligations hereunder to <br />the State, and upon written notice thereof from the State, the <br />Borrower shall immediately take all necessary actions to establish <br />additional water user charges and fees and to pledge additional <br />revenues therefrom in a sufficient amount and in a timely manner to <br />cure the default and to repay the State as required by the <br />Contract. Such additional revenue shall be deemed covered by the <br />existing security interest. If the Borrower fails or refuses to <br />raise its water user charges and fees within 60 days of receipt of <br />such notice from the State, the Borrower shall be considered in <br />default under this provision, and the State shall be entitled to <br />all remedies provided for in paragraph C herein. <br /> <br />11. Without expense to the State, the Borrower shall <br />duly and promptly comply with all terms of the Allotment Contract, <br />including without limitation those terms relating to the Borrower's <br />payment of charges and costs due thereunder. The Borrower agrees <br />to indemnify and hold the State harmless from any liability as a <br />result of the State's security interest in the Southern Water <br />Supply Project. In addition, if at any time, during the term of <br />this Contract, (a) the Southern Water Supply Project facilities, or <br />any portion thereof, are damaged or destroyed, in whole or in part, <br />by fire or other casualty, or (b) title to or use of the Project <br />facilities, or any part thereof, shall be taken under the exercise <br />of the power of eminent domain, the State and the Borrower shall <br />cause any portion of the net proceeds of any insurance claim or <br />condemn~tion award which belong to the Borrower or over which the <br />Borrower has any control to be applied to the prompt replacement, <br />repair and restoration of the Project facilities or any portion <br />thereof. If the net proceeds for all of the entities participating <br />in the Project are insufficient to pay the full cost of the <br />replacement, repair and restoration and the entities participating <br />in the Proj ect determine not to repair, replace or restore the <br />Project facilities, the Borrower shall promptly pay any portion of <br />the net proceed, to which it is entitled or over which it has any <br />control, to the State as a partial payment of its obligations under <br />this Contract. <br /> <br />Page 8 of 13 pages <br />