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Interest Account or the Principal Account, as the case may be, as defined in, created under and in accordance with the terms of, the Trust Agreement Pursuant to Section 5451 of the Government Code of the State of California, the pledge of the Net Water Revenues by the City and the Authonty for the repayment of the principal of, premium, if any, and interest components of the 2017 Installment Sale Payments constitutes a first lien and security interest which immediately attaches to such Net Water Revenues, and is effective and binding against the City, the Authority, their successors, creditors and all others asserting rights therein irrespective of whether those parties have notice of the pledge, irrespective of whether such amounts are or may be deemed to be a fixture and without the need for physical delivery, recordation, filing or further act SECTION 3 03 Prepayment of 2017 Installment Sale Payments (a) The City may prepay from the Net Proceeds on any date all or any part of the principal amount of the unpaid 2017 Installment Sale Payments within each principal payment date in integral multiples of five thousand dollars ($5,000) so that the aggregate annual amounts of principal which shall be payable hereunder after such prepayment date shall be as nearly proportional as practicable to the aggregate annual amounts of the principal then payable hereunder, at a prepayment price equal to the sum of the principal amount prepaid plus accrued interest thereon to the date of prepayment. (b) Before making any prepayment pursuant to this section, the City shall give written notice to the Authority and the Trustee describing such event and specifying the date on which the prepayment will be paid and the order thereof, which date shall be not less than thirty (30) days nor more than sixty (60) days from the date such notice is given, provided, that notwithstanding any such prepayment, the City shall not be relieved of its obligations hereunder, including specifically its obligations under this article, until the Purchase Price shall have been fully paid (or provision for payment thereof shall have been made pursuant to Article VII) ARTICLE IV ADDITIONAL BONDS AND CONTRACTS SECTION 4 01 Additional Bonds and Contracts The City may at any time (i) issue any Bonds the payments under and pursuant to which, or (ii) execute any Contract the Installment Sale Payments under and pursuant to which, as the case may be, are payable from the Net Water Revenues in the Water Revenue Fund on a panty with the payment by the City of the 2017 Installment Sale Payments as provided herein, provided, that prior to the issuance of such Bonds or the execution and delivery of such Contract the City shall file a written certificate of the City with the Authority and the Trustee to the effect that (a) the City is in compliance with all agreements and covenants contained herein, and (b) the audited Net Water Revenues for the Fiscal Year next preceding the date of the adoption by the City Council of the City of the resolution authorizing the issuance of such Bonds or the execution of such Contract, as the case may be (as evidenced by a calculation 9 2762682 3