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<br />during the term of this contract to levy assessments sufficient to pay this loan as <br />required by the terms of this contract and the Promissory Note, to cover all <br />expenditures for operation and maintenance and emergency repair services, and to <br />maintain adequate debt service reserves. In the event the assessments levied by <br />the BORROWER become insufficient to assure such repayment to the CWCB, the <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. <br /> <br />d. Debt Service Reserve Account. To establish and maintain the debt service <br />reserve account, the BORROWER shall deposit an amount equal to one-tenth of an <br />annual payment into its debt service reserve fund on the due date of its first annual <br />loan payment and annually thereafter for the first ten years of repayment of this <br />loan. In the event that the BORROWER applies funds from this account to <br />repayment of the loan, the BORROWER shall replenish the account within ninety <br />(90) days of withdrawal of the funds, <br /> <br />7. Collateral. The collateral for this loan is described in Section 6 (Collateral) of the <br />Proiect Summary. and secured by the deed of trust attached hereto as Appendix 5 <br />and incorporated herein. <br /> <br />a. The BORROWER shall not sell, convey, assign, grant, transfer, mortgage, pledge, <br />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 <br />charges, if any, on this loan remain unpaid. without the prior written concurrence <br />of the CWCB. In the event of any such sale. transfer or encumbrance without <br />the CWCB's written concurrence, the CWCB may at any time thereafter declare <br />all outstanding principal, interest, and late charges, if any, on this loan <br />immediately due and payable. <br /> <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 terminate 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. <br /> <br />9. Warranties. <br /> <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 <br />reason that it is not authorized or obligated to repay the loan to the CWCB as <br />required by this contract. <br /> <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 <br />solicit or secure this contract and has not paid or agreed to pay any person. <br />company, 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. <br /> <br />c. The BORROWER warrants that the Pledged Property and collateral for this loan are <br />not encumbered by any other deeds of trust or liens of any party other than the <br /> <br /> <br />Page 3 of 9 <br />