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<br />b. Establish parity status for this loan. The STATE and the BORROWER recognize that the BORROWER <br />has also pledged such water system revenues to repay the BORROWER'S 1990 EIAF loan, the <br />BORROWER'S 1991 Joint Revenue Bonds, and its 1996 loan from the AUTHORITY. The BORROWER <br />agrees that it shall meet the requirements of its 1990 loan contract with the DOLA, the <br />BORROWER'S Ordinance No. 525 and the BORROWER'S loan contract with the AUTHORITY to establish <br />parity status of this loan with the BORROWER'S 1990 EIAF loan, the BORROWER'S 1991 Joint <br />Revenue Bonds, and with the AUTHORITY'S loan for said revenues. Copies of the DOLA's Consent <br />to Parity, the written certificate required by Section 20(c) of the BORROWER'S Ordinance No. 525, <br />and the parity certificate from an independent certified public accountant that the BORROWER has <br />submitted to the AUTHORITY are attached hereto as APPENDIX 2 and incorporated herein. <br /> <br />c. Establish security interest in the revenues. ThemO.RRO grees that, in order to provide a <br />security interest to the STATE in the pledged reveD t h STATE shall have priority over all <br />other competing claims for said revenues, excePF~ R'S pledges of said revenues for <br />repayment of its 1990 EIAF loan, its 1991 Joint Revenue Bonds~d. its 1996 loan from the <br />AUTHORITY, with which this loan shall have EN' .. at~. ~OIlo\ R shall provide a completed <br />and properly executed Uniform Commercial e<Jt1t~r~ hereinafter referred to as <br />UCC DOCUMENT, attached hereto as APPEN, and incorporated herein. <br /> <br />d. Levy charges and fees for repayment of the loan. The BORROWER shall, pursuant to its election <br />held November 7, 1995, its statutory authority, and as authorized by its ordinances, take all <br />necessary actions consistentiherewith to provide sufficient funds for adequate operation and <br />maintenance, emergency repair services, obsolescence reserves, debt reserves, and to establish <br />revenues from water charges and fees sufficient to pay this contract loan in a timely manner as <br />required by the terms and conditions herein to assure repayment of the loan to the STATE. In the <br />event these revenues are or become insufficient to assure repayment to the STATE as required by <br />the terms and conditions herein, then the BORROWER shall immediately take all necessary action <br />consistent with its statutory authority, including but not limited to adjusting water charges and <br />fees, to raise sufficient revenue to assure repayment of the loan to the STATE. The BORROWER shall <br />deposit an amount equal to one-tenth of an annual payment into its reserve debt service fund on <br />an annual basis for the first ten years of this loan. <br /> <br />12. Collateral. Part of the security provided forthis loan, evidenced by the executed assignment of <br />certificate of deposit attached hereto as Appendix 4 and incorporated herein, shall be an undivided one hundred <br />percent (100%) interest in a certificate of deposit account established by the BORROWER in the amount of one <br />annual loan payment ($22,508.05), hereinafter referred to as CD ACCOUNT. The STATE shall use the funds <br />contained in the CD ACCOUNT for the purpose of paying principal and interest due under this contract not <br />otherwise paid by the BORROWER. Any amount withdrawn by the STATE for this purpose shall be replenished <br />by the BORROWER within sixty days after such withdrawal. Any unused funds contained in the CD ACCOUNT <br />shall be applied to the final payment due under this contract. The STATE shall not disburse any loan funds <br />under this contract until the BORROWER has established the CD ACCOUNT. <br /> <br />13. Collateral during repayment. The BORROWER shall not sell, convey, assign, grant, transfer, <br />mortgage, pledge, encumber, or otherwise dispose of any collateral for this loan, including the revenues <br />pledged to repay the loan herein, so long as any of the principal and any accrued interest required by the <br />promissory note provisions of the contract remain unpaid, without the prior written concurrence of the STATE. <br /> <br />14. Remedies for default. Upon default in the payments herein set forth to be made by the BORROWER, <br />or default in the performance by the BORROWER of any covenant or agreement contained herein, the STATE, at <br />its option, may: <br /> <br />a. declare the entire principal amount and accrued interest then outstanding immediately due and <br />payable; <br /> <br />Town of Lyons <br /> <br />Page 6 of 1 2 <br /> <br />Loan Contract <br />