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except for the liens of the BORROWER'S existing loans as listed in SECTION 5 (Schedule <br /> of Existing Debt), of the PROJECT SUMMARY, which sets forth the position of the lien <br /> created by this CONTRACT in relation to any existing lien(s). <br /> c. Rate Covenant. Pursuant to its statutory authority and as permitted by law, the <br /> BORROWER shall take all necessary actions consistent therewith during the term of <br /> this CONTRACT to establish, levy and collect rates, charges and fees as described in <br /> APPENDIX 4, in amounts sufficient to pay this loan as required by the terms of this <br /> CONTRACT and the PROMISSORY NOTE, to cover all expenditures for operation and <br /> maintenance and emergency repair services, and to maintain adequate debt service <br /> reserves, including obtaining voter approval, if necessary, of increases in the <br /> BORROWER'S rate schedule or taxes, if applicable. <br /> d. Debt Service Reserve Account or Fund. To establish and maintain the debt service <br /> reserve account or fund, the BORROWER shall deposit an amount equal to one-tenth of <br /> an annual payment into its debt service reserve account or fund on the due date of its <br /> first annual loan payment and annually thereafter for the first ten years of repayment of <br /> this loan. In the event that the BORROWER applies funds from this account to <br /> repayment of the loan, the BORROWER shall replenish the account within ninety (90) <br /> days of withdrawal of the funds. The debt service reserve account or fund <br /> requirement will remain in effect until the loan is paid in full. <br /> e. Additional Debts or Bonds. The BORROWER shall not issue any indebtedness <br /> payable from the PLEDGED REVENUES and having a lien thereon which is superior to <br /> the lien of this loan. The BORROWER may issue additional Parity Bonds only with the <br /> prior written approval of the CWCB and consent will be provided only if the following <br /> occurs: <br /> i. The BORROWER is currently and at the time of the issuance of the Parity Bonds in <br /> substantial compliance with all of the obligations of this CONTRACT, including, but not <br /> limited to, being current on the annual payments due under this CONTRACT and in <br /> the accumulation of all amounts then required to be accumulated in the <br /> BORROWER'S debt service reserve fund; <br /> ii. The BORROWER provides to the CWCB a Parity Certificate from an independent <br /> certified public accountant certifying that, based on an analysis of the BORROWER'S <br /> revenues, for 12 consecutive months out of the 18 months immediately preceding <br /> the date of issuance of such Parity Bonds, the BORROWER'S revenues are sufficient <br /> to pay its annual operating and maintenance expenses, annual debt service on all <br /> outstanding indebtedness having a lien on the PLEDGED REVENUES (as defined in <br /> the LOAN RESOLUTION), including this loan, the annual debt service on the proposed <br /> indebtedness to be issued, and all required deposits to any reserve funds required <br /> by this CONTRACT or by the lender(s) of any indebtedness having a lien on PLEDGED <br /> REVENUES. The analysis of revenues shall be based on the BORROWER'S current <br /> rate structure or the rate structure most recently adopted. No more than 10% of <br /> total revenues may originate from tap and/or connection fees. <br /> The BORROWER acknowledges and understands that any request for approval of the <br /> issuance of additional debt must be reviewed and approved by CWCB prior to the <br /> issuance of any additional debt. <br /> f. Annual Statement of Debt Coverage. Each year during the term of this CONTRACT, <br /> the BORROWER shall submit to the CWCB an annual audit report and a certificate of <br /> Page 4 of 12 <br />