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ARTICLE V
<br /> COVENANTS OF THE CITY
<br /> SECTION 5 01 Compliance with 2017 Installment Sale Agreement and Trust
<br /> Agreement, Amendments The City will punctually pay the 2017 Installment Sale Payments in
<br /> strict conformity with the terms hereof, and will faithfully observe and perform all the
<br /> agreements, conditions, covenants and terms contained herein required to be observed and
<br /> performed by it, and will not terminate the 2017 Installment Sale Agreement for any cause
<br /> including, without limiting the generality of the foregoing, any acts or circumstances that may
<br /> constitute failure of consideration, destruction of or damage to the Project or the Water System,
<br /> commercial frustration of purpose, any change in the tax or other laws of the United States of
<br /> America or of the State of California or any political subdivision of either or any failure of the
<br /> Authority to observe or perform any agreement, condition, covenant or term contained herein
<br /> required to be observed and performed by it, whether express or implied, or any duty, liability or
<br /> obligation arising out of or connected herewith or the insolvency, or deemed insolvency, or
<br /> bankruptcy or liquidation of the Authority or any force majeure, including Acts of God, tempest,
<br /> storm, earthquake, war, rebellion, riot, civil disorder, acts of public enemies, blockade or
<br /> embargo, strikes, industrial disputes, lockouts, lack of transportation facilities, fire, explosion, or
<br /> acts or regulations of governmental authorities
<br /> The City will faithfully observe and perform all the agreements, conditions,
<br /> covenants and terms contained in the Trust Agreement required to be observed and performed by
<br /> it, and it is expressly understood and agreed by and among the parties to the 2017 Installment
<br /> Sale Agreement and the Trust Agreement that each of the agreements, conditions, covenants and
<br /> terms contained in each such agreement is an essential and material term of the obligation of the
<br /> City to repay the costs of the acquisition and construction of the Project and the costs and
<br /> expenses incidental thereto paid by the Authority pursuant to, and in accordance with, and as
<br /> authorized under law and this 2017 Installment Sale Agreement
<br /> SECTION 5 02 Use of Proceeds of Authority's Series 2017 Bonds The Authority
<br /> and the City agree that the proceeds of the Series 2017 Bonds will be used by the Authority to
<br /> finance the Project and to pay the incidental costs and expenses related thereto as provided
<br /> herein and in the Trust Agreement
<br /> SECTION 5 03. Against Encumbrances The City will pay or cause to be paid
<br /> when due all sums of money that may become due or purporting to be due for any labor,
<br /> services, materials, supplies or equipment furnished, or alleged to have been furnished, to or for
<br /> the City in, upon, about or relating to the Water System and will keep the Water System free of
<br /> any and all liens against any portion of the Water System In the event any such lien attaches to
<br /> or is filed against any portion of the Water System, the City will cause each such lien to be fully
<br /> discharged and released at the time the performance of any obligation secured by any such lien
<br /> matures or becomes due, except that if the City desires to contest any such lien it may do so If
<br /> any such lien shall be reduced to final judgment and such judgment or any process as may be
<br /> issued for the enforcement thereof is not promptly stayed, or if so stayed and such stay thereafter
<br /> expires, the City will forthwith pay or cause to be paid and discharged such judgment The City
<br /> will, to the maximum extent permitted by law, indemnify and hold the Authority and the Trustee
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