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shall have priority over all other competing claims with respect to the PLEDGED REVENUES, <br /> except for the parity lien on the PLEDGED REVENUES of any PARITY INDEBTEDNESS. <br /> c. Assessment 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 this <br /> CONTRACT to establish, levy and collect rates, charges, assessments and fees as described in <br /> APPENDICES 4a and 4b, 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 reserves. <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 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 (go) 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. This debt service reserve account shall be solely for the benefit of this Loan Contract <br /> and the repayment of the PROMISSORY NOTE. <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 is consecutive months out of the 18 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 /> Page 5 of 14 <br />