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maintain adequate .debt service reserves, including obtaining voter approval, if necessary, of increases in the BORROWER'S water user fees. d. Debt Service Reserve Account. Within fifteen working days after the effective date of this contract, the BORROWER shall deposit an amount equal to one annual loan payment into its debt service reserve account. In the event that the Borrower applies funds from this account to repayment of the loan, the Borrower shall replenish the account within ninety (90) days of withdrawal of the funds. e. Additional Debts or Bonds. The BORROWER shall not issue any indebtedness payable from the pledged revenues and having a lien thereon which is superior to the lien of this loan. The BORROWER may issue parity debt only with the prior written approval of the STATE, provided that: i. The BORROWER is currently and at the time of the issuance of the parity debt in substantial compliance with all of the obligations of this contract, including, but not limited to, being current on the annual payments due under this contract and in the accumulation of all amounts then required to be accumulated in the BORROWER'S debt service reserve fund; ii. The BORROWER provides to the STATE a Parity Certificate from an independent certified public accountant certifying that, based on an analysis of the BORROWER'S revenues, for 12 consecutive months out of the 18 months immediately preceding the date of issuance of such parity debt, the BORROWER'S revenues are sufficient to pay its annual operating and maintenance expenses, annual debt service on all outstanding indebtedness having a lien on the pledged revenues, including this loan, the annual debt service on the proposed indebtedness to be issued, and all required deposits to any reserve funds required by this contract or by the lender(s) of any indebtedness having a lien on the pledged revenues. The analysis of revenues shall be based on the BORROWER'S current rate structure or the rate structure most recently adopted. No more than 10% of total revenues may originate from tap and/or connection fees. The BORROWER acknowledges and understands that any request for approval of the issuance of additional debt must be reviewed and approved by the CWCB Executive Director prior to the issuance of any additional debt. 12. Annual Statement of Debt Coverage. Each year during the term of this contract, the BORROWER shall submit to the STATE an annual audit report and a certificate of debt service coverage from a Certified Public Accountant. 13. Security during repayment. The BORROWER shall not convey, assign, grant, transfer, mortgage, pledge, encumber, or otherwise dispose of the revenues pledged herein to repay this loan, so long as any of the principal, accrued interest, and late charges, if any, on this loan remain unpaid, without the prior written concurrence of the STATE. In the event of any such transfer or encumbrance without the STATE'S written concurrence, the STATE may at any time thereafter declare all outstanding principal and interest on this loan immediately due and payable. 14. Remedies for default. Upon default in the payments herein set forth to be made by the BORROWER, or default in the performance by the DISTRICT and/or the BORROWER of any covenant or agreement contained herein, the STATE, at its option, may: Ute Water Activity Enterprise and Ute Water Conservancy District Page 7 of 13