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LOAN CONTRACT "indsor Reservoir and CanaL Co. Emergency Loan 5. (State may release contract at its option): In its sole discretion, the State may at any time and in writing give any consent, deferment, subordination, release, satisfaction, or termination of any or all of the Borrower's obligations under this agreement, with or without valuable consideration, upon such terms and conditions as the State may determine to be: (a) advisable to further the purposes of this contract or to protect the State's financial interest therein, and (b) consistent with both the statutory purposes of this contract and the limitations of the statutory authority under which it is made. 6. (The Borrower further Warrants): The Borrower warrants that by acceptance of the loan money pursuant to the terms of this contract and by the Borrower's representation herein, the Borrower shall be estopped from asserting for any reason that it is not authorized or obligated to repay the loan money to the State as required by this contract. 7. (Casualty and Eminent Domain): If, at any time, during the term of this Contract, (a) the Borrower's Project facilities which are pledged as collateral for this loan, including buildings, or any portion thereof, are damaged or destroyed, in whole or in part, by fire or other casualty, or (b) title to or use of the Project facilities or any part thereof shall be taken under the exercise of the power of eminent domain, the State and the Borrower shall cause the net proceeds of any insurance claim or condemnation award to be applied to the prompt replacement, repair and restoration of the Project facilities or any portion thereof. Any net proceeds remaining after such work has been completed shall be paid to the Borrower. If the net proceeds are insufficient to pay the full cost of the replacement, repair and restoration, the Borrower shall complete the work and pay any cost in excess of the net proceeds (provided, however, that the Borrower shall be obligated to pay any such cost in excess of net proceeds only to the extent of any moneys available therefor in any funds created under this Contract). 8. (Borrower to make the services of said project available without discrimination): The Borrower shall make the services of said project available within its capacity to all qualified persons in the Borrower's service area without discrimination as to race, color, religion, or natural origin at reasonable charges (including assessments, taxes, or fees), whether for one or more classes of service, in accordance with a schedule of such charges formally adopted by the Borrower through its By-laws, as may be modified from time to time. The initial rate schedule must be approved in writing by the State before any such charges are initially assessed. Thereafter, the Borrower may, subject to the approval of the State, make such modifications to the rate schedule as the Borrower deems necessary to efficiently and economically provide for the financial requirements of the system, including repayment of the State, as long as the rate schedule remains reasonable and non-discriminatory.o Page 10 of ~ Pages