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c. The DISTRICT has complied with the requirements of Article X, Section 20 of the <br /> Colorado Constitution in connection with an election held within the DISTRICT in <br /> November 2015 and the execution and delivery of the LOAN DOCUMENTS. <br /> 8. Pledge of revenues. The BORROWER irrevocably pledges to the CWCB, for <br /> purposes of repayment of this loan, the PLEDGED REVENUES as defined in the Loan <br /> Resolution set forth in APPENDIX 3 and any other funds legally available to the <br /> BORROWER, in an amount sufficient to pay the annual payment due under this <br /> CONTRACT. <br /> 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 5 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 /> Revenues, 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. Rate Covenant. Pursuant to its statutory authority and as permitted by law, <br /> the BORROWER shall take all necessary actions consistent therewith during the <br /> term of this CONTRACT to establish, levy and collect rates, charges and fees <br /> as described in APPENDIX 4, in amounts sufficient to pay this loan as required <br /> by the terms of this CONTRACT and the PROMISSORY NOTE, to cover all <br /> expenditures for operation and maintenance and emergency repair services, <br /> and to maintain adequate debt service reserves, including obtaining voter <br /> approval, if necessary, of increases in the BORROWER'S rate schedule or <br /> taxes, if applicable. <br /> d. 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 /> e. 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 /> Page 4 of 13 <br />