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<br />,,-"~ -~, <br />!-: <br /> <br />LOAN CONTRACT <br />Summit Reservoir and Irrigation Co. <br />Emergency loan <br /> <br />revenues resulting therefrom, are or become insufficient to assure repayment to the <br />State as required by the terms and conditions herein, then the Borrower, upon written <br />notice thereof from the State, shall immediately take all necessary action consistent <br />with its By-laws, including but not limited to additional assessments, to raise sufficient <br />revenue to assure repayment of the project loan to the State. <br /> <br />9. (SECURITY INTEREST PROVISIONS): <br /> <br />9a. The Borrower agrees that the specific revenues to be pledged to repay the <br />State shall include, without being limited to, an assessment levied for that purpose as <br />authorized by Resolution of the Borrower. <br /> <br />9b. The Borrower hereby pledges such assessment revenues to repay the State <br />loan, agrees that these revenues will be set aside and kept separate from other <br />Borrower revenues, warrants that these revenues will not be used for any other <br />purpose, and agrees to provide the State a perfected security interest such that the <br />State has priority over all other competing claims for such secured revenues. <br /> <br />9c. Such security interest shall be in the form provided by the State irrevocably <br />pledging such revenues on the date of execution of this contract. Copies of such security <br />interest (Uniform Commercial Code--Security Agreement and Uniform Commercial <br />Code--Financing Statement) shall be attached hereto and incorporated herein as <br />Exhibits D and E, respectively. The security interest of the Borrower is a condition <br />precedent to State performance on this contract. <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 />12. (Adhere to applicable laws): Shall strictly adhere to all applicable Federal, <br />State, and local laws and regulations that have been or may hereafter be established. <br /> <br />Page 1 of l1. Pages <br />