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<br />from the CWCB, or, at the CWCB's discretion. said interest shall be deducted from the
<br />final disbursement of loan funds that the CWCB makes to the BORROWER.
<br />
<br />3. Return of Unused Loan Funds. Any loan funds disbursed but not expended for the
<br />PROJECT in accordance with the terms of this contract shall be remitted to the CWCB
<br />within 30 calendar days from notification from the CWCS of either (1) completion of the
<br />PROJECT or (2) upon the determination by the CWCB that the PROJECT will not be
<br />completed.
<br />
<br />4. Collateral. The collateral for this loan is described in Section 5 (Collateral) of the
<br />Project Summary, and deed of trust attached hereto as Appendix 3 and incorporated
<br />herein.
<br />
<br />a. The BORROWER shall not sell, convey, assign, grant, transfer, mortgage, pledge,
<br />encumber, or otherwise dispose ofthe collateral for this loan so long as any of
<br />the principal, accrued interest, and late charges, if any, on this loan remain
<br />unpaid, without the prior written concurrence of the CWCB. In the event of any
<br />such sale. transfer or encumbrance without the eWCB's written concurrence, the
<br />CWCS may at any time thereafter declare all outstanding principal, interest, and
<br />late charges, if any, on this loan immediately due and payable.
<br />
<br />5. 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 ewcs agrees to release and terminate any and all of the eWCB'S right, title,
<br />and interest in and to the collateral and the property pledged to repay this loan.
<br />
<br />6. 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 collateral for this loan is not encumbered by any
<br />other deeds of trust or liens of any party other than the CWCB or in any other
<br />manner, except for any pre-existing lien(s) identified in Seotion 6 (Schedule of
<br />Existing Debt) of the, Project Summary, which sets forth the position of the lien
<br />created by this contract in relation to any pre-existing Iien(s). Documentation
<br />establiShing the relative priorities of said liens, if necessary, is attached to the
<br />Project Summary and incorporated herein.
<br />
<br />7. Change of Ownership of Water Shares During Term of Contract. If the interest
<br />rate for this loan is based on the CWCB's agricultural or blended agricuitural and
<br />municipal and/or commercial and/or industrial rates, the BORROWER agrees to notify
<br />the CWCB of any change of the ownership of the water rights represented by its
<br />
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