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15 <br /> BORROWER may be declared ineligible for further contracts with the BOARD. The BORROWER shall, <br /> however,be given a reasonable time in which to cure this noncompliance_ <br /> 4.31 Transfer of Ownership <br /> During the term of this loan,any change in ownership of the water system(s)improved with funds received by <br /> the BORROWER under this loan agreement must be approved in writing by the BOARD. As a condition of <br /> approval,the BOARD reserves the right to demand payment in full of the outstanding principal balance of the <br /> loan. <br /> 4.32 Use of Funds <br /> The BORROWER covenants and agrees that it will use the proceeds of the loan only for the purposes of the <br /> project,as described in ATTACHMENT 1 <br /> 4.33 False,Incorrect or Incomplete Information <br /> The BORROWER warrants that it has not submitted any materially false,incorrect,or incomplete information to <br /> the BOARD. <br /> 4.34 Authority <br /> The BORROWER represents and warrants that it is duly organized,validly existing, and in good standing under <br /> the laws of the state of Washington in force as of the date of this Agreement;that it has the legal power to enter <br /> into this Agreement and to exercise its rights and perform its obligations under this Agreement; and that all <br /> actions required to authorize the making,execution,and performance of this Agreement have been taken. <br /> 4.35 Litigation <br /> The BORROWER warrants that there is no threatened or pending litigation, investigation, or legal action before <br /> any court, arbitrator, or administrative agency that, if adversely determined, would have a materially adverse <br /> effect on the BORROWER'S ability to repay.the loan. <br /> 84 <br /> Page 10 <br /> SRF Loan Agreement <br /> Municipal Systems <br />