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<br />14 <br />respects payable on a parity with the Installment Payments and not prior thereto; provided that <br />the City shall not make a payment on such Governmental Loan to the extent it would have the <br />effect of causing the City to fail to pay Installment Payments on a timely basis. In such event, <br />during each Bond Year, the City shall make Installment Payments and payments on such <br />Governmental Loan on a pro rata basis. For the avoidance of doubt, this paragraph dictates the <br />dates on which principal and interest due in a year must be paid, and does not require level debt <br />service or annual level amortization or prohibit debt service structures involving balloon <br />payments or interest that accrues and compounds until maturity. <br /> <br /> <br />ARTICLE V <br /> <br />REPRESENTATIONS, COVENANTS AND WARRANTIES <br /> <br />Section 5.01. Compliance with Installment Purchase Contract. <br /> <br />The City will punctually pay the Installment Payments in strict conformity with the terms <br />hereof, and will faithfully observe and perform all the agreements, conditions, covenants and <br />terms contained herein required to be observed and performed by it, and will not terminate this <br />Installment Purchase Contract for any cause whatsoever, including, without limiting the <br />generality of the foregoing, any acts or circumstances that may constitute failure of <br />consideration, destruction of or damage to the Project, condemnation of the Project by any <br />governmental entity, commercial frustration of purpose, any change in the tax or other laws of <br />the United States of America or of the State of California or any political subdivision of either or <br />any failure of the Authority to observe or perform any agreement, condition, covenant or term <br />required to be observed and performed by it contained herein, whether express or implied, or <br />any duty, liability or obligation arising out of or connected with this Installment Purchase <br />Contract. <br /> <br />The City will faithfully observe and perform all the agreements, conditions, covenants <br />and terms contained in the Indenture required to be observed and performed by it, and it is <br />expressly understood and agreed by and among the parties to this Installment Purchase <br />Contract and the Indenture that each of the agreements, conditions, covenants and terms <br />contained in the Indenture and this Installment Purchase Contract is an essential and material <br />term of the purchase of and any payment for the Project by the City. <br /> <br />The City will faithfully observe and perform all the agreements, conditions, covenants <br />and terms required to be observed and performed by it pursuant to all outstanding Parity <br />Obligations as such may from time to time be amended. <br /> <br />Section 5.02. Against Encumbrances. <br /> <br />The City hereby covenants that, subject to Section 7.02 of the Indenture, there is no <br />pledge of or lien on Net Revenues senior to the pledge and lien securing the Installment <br />Payments. The City will not make any further pledge of or place any lien on the Net Revenues, <br />provided that the City may at any time, or from time to time, pledge or encumber the Net <br />Revenues in connection with the issuance or execution of Parity Obligations or other obligations <br />permitted by Section 4.03 hereof, or subordinate to the pledge of Net Revenues herein. <br /> <br />8.A. - Page 182 of 255 <br />810