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. . 4.2 Ril!hts. Preferences and Obligations. The designations, preferences, rights and obligations of the shares of stock which the Corporation is authorized to issue, and the limitations thereof, are as follows: (a) Ownership of each share of Class A common stock shall entitle the holder thereof to one-tenth of one acre-foot of the annual yield of Eagle Park Reservoir, as such yield may be subsequently defined by the Corporation. The Class A common stock shall be divided into two series: "Series I" and "Series 2." Of the 20,130 shares of common stock designated as "Class A" common stock, 11,000 shares shall be designated as "Class A Series 1" shares and 9,130 shares shall be designated as "Class A Series 2" shares. (i) Class A Series I shares shall entitle the holder thereof to use the water represented by such shares on a first priority basis for all decreed beneficial uses. (ii) Class A Series 2 shares will entitle the holder thereof to use the water represented by such shares on a second priority basis for all decreed beneficial uses. (iii) If in any year the yield of Eagle Park Reservoir is less than one acre foot of water for each ten outstanding shares of Class A common stock in the Corporation, the water physically available shall be allocated first among the outstanding Class A Series 1 common stock on a pro rata basis, based on the number of shares of the Corporation's Class A Series 1 common stock owned by each shareholder. Thereafter, any remaining yield in Eagle Park Reservoir, after the full entitlement of all outstanding Class A Series 1 common stock has been met, shall be allocated among the outstanding Class A Series 2 common stock on a pro rata basis, based on the number of shares of the Corporation's Class A, Series 2 common stock owned by each shareholder. (b) Ownership of each share of Class B common stock shall entitle the holder thereof to one acre foot of Bomestake Reservoir water. If in any year the yield of Homestake Reservoir water is less than one acre foot for each outstanding share of Class B common stock in the Corporation, the water physically available shall be allocated among the outstanding Class B common stock on a pro rata basis, based on the number of shares of the Corporation's Class B common stock owned by each shareholder. (c) All shares of the Corporation's common stock shall be subject to and shall obligate the holders thereof to comply with all accounting and reporting requirements, and any other obligations imposed by the Corporation pursuant to its authority under these Articles of Incorporation and its Bylaws, regarding the use of Eagle Park Reservoir and the Homestake Reservoir water. Failure of a stockholder to comply with the provision of such requirements or obligations may result in suspension of service to such stockholder, or forfeiture of such stockholder's shares of the Corporation's common stock pursuant to Section 8.2 below. fd0984 -3-