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9. Pledge of Revenues. The Borrower irrevocably (but not exclusively) pledges to the CWCB, <br /> for the purpose of repaying the TOTAL LOAN AMOUNT, the PLEDGED REVENUES, in such <br /> amount as is necessary to make each annual payment due under this LOAN CONTRACT. Such <br /> pledge of the PLEDGED REVENUES is on parity with the debt identified in Section 5 of <br /> Appendix i (SCHEDULE OF EXISTING DEBT) and any additional indebtedness.that may be <br /> secured by the PLEDGED REVENUES in the future that is incurred in accordance with Section <br /> B.9.e. hereof, and together with the Existing Parity Debt, shall be the BORROWER'S "PARITY <br /> INDEBTEDNESS." <br /> a. Segregation of Pledged Revenues. The PLEDGED REVENUES shall be accounted for and <br /> maintained in an account separate from other BORROWER revenues at all times. The <br /> PLEDGED REVENUES shall be used first to pay debt service on the TOTAL LOAN AMOUNT and all <br /> other PARITY INDEBTEDNESS on an equal basis and thereafter may be used for any and all <br /> other expenses. <br /> b. Establish Security Interest. The BORROWER has duly executed a SECURITY AGREEMENT, <br /> (attached as Appendix 5) and incorporated herein,to provide a security interest to the CWCB <br /> in the PLEDGED REVENUES. The lien of this LOAN CONTRACT on the PLEDGED REVENUES shall <br /> have priority over all other competing claims with respect to the PLEDGED REVENUES, except <br /> 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 and fees as described in Appendix 5, in <br /> amounts sufficient to pay this loan as required by the terms of this CONTRACT and the <br /> PROMISSORY NOTE, to cover all expenditures for operation and maintenance and emergency <br /> 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 (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 additional indebtedness <br /> payable from the PLEDGED REVENUES and having a lien thereon which is superior to the lien <br /> of this loan. The BORROWER may issue parity debt only with the prior written approval of <br /> the 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 /> Page 7 of i6 <br />