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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. The BORROWER agrees that, in order to provide a
<br />security interest to the STATE in the pledged revenues so that the STATE shall have priority over all
<br />other competing claims for said revenues, except the BORROWER'S pledges of said revenues for
<br />repayment of its 1990 EIAF loan, its 1991 Joint Revenue Bonds, and its 1996 loan from the
<br />AUTHORITY, with which this loan shall have parity status, the BORROWER shall provide a completed
<br />and properly executed Uniform Commercial Code Security Agreement hereinafter referred to as
<br />UCC DOCUMENT, attached hereto as APPENDIX 3 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 consistent therewith 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, inCludin9 but not limited to adjustin9 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 for this 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%1 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 shali 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 durin9 repayment. The BORROWER shall not sell, convey, assign, 9rant, 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 lon9 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
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<br />Loan Contract
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