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liquidation of collateral, prepayment of the Loan; setoff, <br /> counterclaim, or otherwise. In the event that Bank exercises any <br /> right of offset against any borrower under a Loan, Bank shall apply <br /> amounts offset ratably between the Loan and any other indebtedness <br /> or obligations of the borrower to Bank. <br /> 2.3 Municipality shall reimburse Bank upon demand for Municipality's <br /> pro rata share of all reasonable out-of-pocket expenses, including <br /> attorneys' fees, incurred by Bank in connection with any action or <br /> authority exercised by Bank in collecting or seeking to collect any <br /> Loan. <br /> 3. Non-Recourse Sale. <br /> It is understood and agreed that Bank's sales of Loan participations to <br /> Municipality pursuant to this Agreement are made without recourse or <br /> warren of any kind by Bank, except as provided in Section l hereof and <br /> this Section 3. Bank warrants that each Loan offered to Municipality for <br /> participation shall be a legal, valid, and binding obligation of its <br /> borrower(s), provided, however, that Bank makes no representation or <br /> warranty of any kind, express or implied, with respect to the <br /> creditworthiness of the borrower(s) under any of the Loans or the <br /> collectability of the Loans. <br /> 4. Loan Administration. <br /> Bank may take any action determined by it in its sole discretion to be <br /> appropriate to enforce payment of any Loan or to realize upon any <br /> collateral but it shall not, without the consent of Municipality, extend, <br /> renew, amend or change any Loan notes or mortgages, or grant any <br /> consents, waivers, variances or releases thereunder, or permit the release <br /> or substitution of any collateral therefor.. Notwithstanding the foregoing, <br /> if Be-ak and Municipality are unable to agree upon any act described in <br /> the prpceding sentence which requires consent of Municipality,, the <br /> deciah""..6 : :garding such acts shall be made by Bank, provided that <br /> Muni cip.-,`-ity may then, at its option, purchase the Bank's interest in the <br /> Loan for a price equal to-such interest, and upon such payment, all <br /> interest of Bank in the Loan shill cease. Bank will service and manage <br /> 3 <br />