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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 an <br /> annual payment into its debt service reserve account or fund on the due date of its first annual <br /> loan payment and annually thereafter for the first ten years of repayment of this loan. In the <br /> event that the BORROWER applies funds from this account to repayment of the loan, the <br /> BORROWER shall replenish the account within ninety (9o) days of withdrawal of the funds. <br /> The debt service reserve account or fund requirement is in effect until the loan is paid in <br /> full. <br /> e. Additional Debts or Bonds. The BORROWER shall not issue any indebtedness payable <br /> from the PLEDGED REVENUES and having a lien thereon which is superior to the lien of this <br /> loan. The BORROWER may issue parity debt only with the prior written approval of the <br /> CWCB, provided that: <br /> i. The BORROWER is currently and at the time of the issuance of the parity debt in <br /> substantial compliance with all of the obligations of this CONTRACT, including, but <br /> not limited to, being current on the annual payments due under this CONTRACT and <br /> in 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 i8 months immediately preceding the <br /> date of issuance of such parity debt, the BORROWER'S revenues are sufficient to pay its <br /> annual operating and maintenance expenses, annual debt service on all outstanding <br /> indebtedness having a lien on the pledged revenues, including this loan, the annual <br /> debt service on the proposed indebtedness to be issued, and all required deposits to <br /> any reserve funds required by this CONTRACT or by the lender(s) of any indebtedness <br /> having a lien on the pledged revenues. The analysis of revenues shall be based on the <br /> BORROWER'S current rate structure or the rate structure most recently adopted. No <br /> more than io%of total revenues may originate from tap and/or connection fees; <br /> iii. The BORROWER acknowledges and understands that any request for approval of <br /> the issuance of additional debt must be reviewed and approved by the CWCB prior to <br /> the issuance of any additional debt. <br /> f. Annual Statement of Debt Coverage. Each year during the term of this CONTRACT, the <br /> BORROWER shall submit to the CWCB an annual audit report. <br /> g. Pledged Revenues During Loan Repayment. The BORROWER shall not sell, convey, <br /> assign, grant, transfer, mortgage, pledge, encumber, or otherwise dispose of the PLEDGED <br /> REVENUES, so long as any of the principal, accrued interest, and late charges, if any, on this <br /> loan remain unpaid,without the prior written concurrence of the CWCB. <br /> Page 5 of 14 <br />