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a. Segregation of Pledged Revenues. The BORROWER shall set aside and keep <br /> the PLEDGED REVENUES in an account separate from other BORROWER <br /> revenues and warrants that these revenues will not be used for any other <br /> purpose. <br /> b. Establish Security Interest. The BORROWER has duly executed a SECURITY <br /> AGREEMENT, attached hereto as APPENDIX 4 and incorporated herein, to <br /> provide a security interest to the CWCB in the PLEDGED REVENUES. The CWCB <br /> shall have priority over all other competing claims with respect to the Pledged <br /> Revenue, except for the liens of the BORROWER'S existing loans as listed in <br /> Section 5 (Schedule of Existing Debt or Schedule of Parity Bonds), of the <br /> PROJECT SUMMARY, which sets forth the position of the lien created by this <br /> CONTRACT in relation to any existing lien(s). <br /> c. Debt Service Reserve Account or Fund. To establish and maintain the debt <br /> service reserve account or fund, the BORROWER shall deposit an amount equal <br /> to one-tenth of an annual payment into its debt service reserve account or fund <br /> on the due date of its first annual loan payment and annually thereafter for the <br /> first ten years of repayment of this loan. In the event that the BORROWER <br /> applies funds from this account to repayment of the loan, the BORROWER shall <br /> replenish the account within ninety (90) days of withdrawal of the funds. The <br /> debt service reserve account or fund requirement will remain in effect until the <br /> loan is paid in full. <br /> d. Additional Debts or Bonds. The BORROWER shall not issue any <br /> indebtedness payable from the NET REVENUE and having a lien thereon which <br /> is superior to the lien of this loan. The BORROWER may issue additional Parity <br /> Bonds only with the prior written approval of the CWCB and consent will be <br /> provided only if the following occurs: <br /> i. The BORROWER is currently and at the time of the issuance of the Parity <br /> Bonds in substantial compliance with all of the obligations of this CONTRACT, <br /> including, but not limited to, being current on the annual payments due under <br /> this CONTRACT and in the accumulation of all amounts then required to be <br /> accumulated in the BORROWER'S debt service reserve fund; <br /> ii. The BORROWER provides to the CWCB a Parity Certificate from an <br /> independent certified public accountant certifying that, based on an analysis <br /> of the BORROWER'S revenues, for 12 consecutive months out of the 18 <br /> months immediately preceding the date of issuance of such Parity Bonds, the <br /> BORROWER'S revenues are sufficient to pay its annual operating and <br /> maintenance expenses, annual debt service on all outstanding indebtedness <br /> having a lien on the PLEDGED REVENUE (as defined in the LOAN RESOLUTION), <br /> including this loan, the annual debt service on the proposed indebtedness to <br /> be issued, and all required deposits to any reserve funds required by this <br /> CONTRACT or by the lender(s) of any indebtedness having a lien on PLEDGED <br /> REVENUE. The analysis of revenues shall be based on the BORROWER'S <br /> current rate structure or the rate structure most recently adopted. No more <br /> Page 4 of 13 <br />