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<br />LOAII CllIITRACT <br />"'indsor Reservoir and Canal Co. <br />Emergency loan <br /> <br />9. (SECURITY INTEREST PROVISIONS): <br /> <br />9a. (Borrower Pledges Assessments to Repay the Loan): The Borrower agrees <br />that the specific revenues to be pledged to repay the State shall include, without being <br />limited to, an assessment levied for that purpose as authorized by Resolution of the <br />Borrower. <br /> <br />9b. (Assessment Revenues for this Loan are to be kept Separate): The Borrower <br />hereby pledges such assessment revenues to repay the State loan, agrees that these <br />revenues will be set aside and kept separate from other Borrower revenues, warrants <br />that these revenues will not be used for any other purpose, and agrees to provide the <br />State a perfected security interest such that the State has priority over all other <br />competing c1alms for such secured revenues. <br /> <br />9c. (Establish Security Interest in the Assessment Revenues): Such security <br />interest shall be in the form provided by the State irrevocably pledging such revenues <br />on the date of execution of this contract. Copies of such security interest (Uniform <br />Com.rilercial Code--Security Agreement and Uniform Commercial Code--Financing <br />Statement) shall be attached hereto and incorporated herein as Exhibits D and E, <br />respectively. The security interest of the Borrower is a condition precedent to State <br />performance on this contract. <br /> <br />9d. .(Security Interest Continuation Statement required at end of Forth Year): <br />During the fourth year that this contract is in effect, the Borrower shall have the <br />obligation to provide the State with a fully and properly executed Continuation <br />Statement (Form UCC 3) of the Security Interest (Security Agreement and Financing <br />Statement, Exhibits D and E) required by this paragraph. Said Continuation Statement <br />must be delivered to the State in such a manner that the State has actual possession of <br />the fully and properly executed form no less than 30 days before the end of the fourth <br />year in which this contract is effective. <br /> <br />10. (Levy assessments as necessary for operations, maintenance, reserves, and <br />debt reserves): Pursuant to its By-laws, adjust its operating costs and service charges <br />and levy assessments from time to time as necessary to provide sufficient funds for <br />adequate operation and maintenance, emergency repair services, obsolescence reserves, <br />and debt reserves. <br /> <br />11. (Provide reports and allow periodic inspections): Provide the State with such <br />periodic reports as the State may require and permit periodic inspections of its <br />operations and accounts by a designated representative of the State. <br /> <br />Page 2 of ~ Pages <br />