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C. That COLTON and SAN BERNARDINO covenant and agree to <br />impose rates sufficient to meet all of their respective debt <br />obligations under all conditions, or the funds of COLTON and <br />SAN BERNARDINO, from any source, shall be pledged to repay debt <br />incurred as part of the Demonstration System; <br />d. Authorization to SAWPA to: <br />i. Create legal and administrative resources to <br />enforce the financing agreements; <br />ii. Hold a 10% bond reserve; <br />iii. Hold reserve earnings until each debt payment is <br />made; <br />iv. Require a surcharge on future debt payments to <br />make up for any and all delinquencies. <br />SAWPA shall not execute the final form of any financing agreements <br />without the prior approval of COLTON and SAN BERNARDINO. COLTON and <br />SAN BERNARDINO hereby acknowledge and agree that, for the full term <br />of any approved financing agreement, that they shall do, or refrain <br />from doing, whatever is reasonably necessary to ensure that SAWPA <br />fulfills all terms and conditions of such financing agreements, <br />including, without limitation, the timely payment of all debt <br />installment payments. In the event SAWPA is in default under any <br />financing agreement, which default results from actions (or <br />inactions) of either SAN BERNARDINO or COLTON, or both, such PARTIES <br />shall promptly take all necessary corrective action and fully <br />4 <br />