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<br />BORROWER shall immediately take all necessary action consistent with its statutory
<br />authority, its articles of incorporation and bylaws including, but not limited to, levying
<br />additional assessments to raise sufficient revenue to assure repayment of this loan.
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<br />d Assessments For Operations, Maintenance And Reserves. Pursuant to its
<br />statutory authority, articles of incorporation and bylaws, the BORROWER shall levy
<br />assessments in sufficient amounts to provide funds for adequate operation and
<br />maintenance, emergency repair services, and obsolescence and debt service
<br />reserves.
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<br />e. 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 this loan. In the event that
<br />the BORROWER applies funds from this account to repayment of the loan, the
<br />BORROWER shall replenish the account within ninety (90) days of withdrawal of the
<br />funds.
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<br />7 Collateral. The collateral for this loan is described in Section 3 (Collateral) of the Project
<br />Summary. The BORROWER shall not sell, convey, assign, grant, transfer, mortgage,
<br />pledge, encumber, or otherwise dispose of the collateral for this loan, including the
<br />Pledged Property, so long as any of the principal, accrued interest, and late charges, if
<br />any, on this loan remain unpaid, without the prior written concurrence of the CWCS. In
<br />the event of any such sale, transfer or encumbrance without the CWCS'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.
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<br />8. 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 tenninate any and all of the CWCB's right, title,
<br />and interest in and to the collateral and the property pledged to repay this loan.
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<br />9. Warranties.
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<br />a. The BORROWER warrants that, by accepting the loan money under this contract and.
<br />by 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 CWCS as
<br />required by tl1is contract.
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<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 solicit
<br />or secure this contract and has not paid or agreed to pay any person, company.
<br />corporation, individual, or firm, other than a bona fide employee, any fee,
<br />commission, percentage, gift, or other consideration contingent upon or resulting
<br />from the award or the making of this contract.
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<br />c. The BORROWER warrants that the collateral for this loan is not encumbered by any
<br />other deeds of trust or liens of any party other than the CWCS or in any other
<br />manner.
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<br />10. Change of Use of Water Shares During Term of Contract. If the interest rate for
<br />this loan is based on the CWCS's agricultural or blended agricultural and municipal
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<br />Tunnel Water Company
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<br />Loan Contract
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