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immediately preceding the date of issuance of such parity debt, the
<br />BORROWER's revenues are sufficient to pay its annual operating and
<br />maintenance expenses, annual debt service on all outstanding indebtedness
<br />having a lien on the pledged revenues, including this loan, the annual debt
<br />service on the proposed indebtedness to be issued, and all required deposits
<br />to any reserve funds required by this contract or by the lender(s) of any
<br />indebtedness having a lien on the pledged revenues. The analysis of
<br />revenues shall be based on the BoRROweR's current rate structure or the rate
<br />structure most recently adopted. No more than 10% of total revenues may
<br />originate from tap and/or connection fees.
<br />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
<br />Director prior to the issuance of any additional debt.
<br />f. Annual Statement of Debt Coverage. Each year during the term of this contract,
<br />the BoRROweR shall submit to the CWCB an annual audit report and a certificate of
<br />debt service coverage from a Certified Public Accountant.
<br />9. Coilateral During Loan Repayment. The BoRROweR shall not sell, convey, assign,
<br />grant, transfer, mortgage, pfedge, encumber, or otherwise dispose of the Pledged
<br />Revenues, so long as any of the principal, accrued interest, and late charges, if any,
<br />on this loan remain unpaid, without the prior written concurrence of the CWCB. In the
<br />event of any such sale, transfer or encumbrance without the CWCB'S written
<br />concurrence, the CWCB may at any time thereafter declare all outstanding principal,
<br />interest, and late charges, if any, on this loan immediately due and payable.
<br />10. Release After Loan Is Repaid. Upon complete repayment to the CWCB of the entire
<br />principal, ail accrued interest, and late charges, if any, as specified in the Promissory
<br />Note, the CWCB agrees to release and terminate any and all of the CWCB's right, title,
<br />and interest in and to the revenues pledged to repay this loan.
<br />11. Warranties.
<br />a. The BoRROweR warrants that, by acceptance of the loan under this contract and by
<br />its representations herein, the BoRROwER shall be estopped from asserting for any
<br />reason that it is not authorized or obligated to repay the loan to the CWCB as
<br />required by this contract.
<br />b. The BoRROweR warrants that it has not employed or retained any company or
<br />person, other than a bona fide employee working solely for the BORROWER, to
<br />solicit or secure this contract and has not paid or agreed to pay any person,
<br />company, corporation, individual, or firm, other than a bona fide employee, any fee,
<br />commission, percentage, gift, or other consideration contingent upon or resuiting
<br />from the award or the making of this contract.
<br />c. The BoRROweR warrants that the Pledged Revenues and collateral for this foan
<br />are not encumbered by any other deeds of trust or liens of any party other than the
<br />CWCB or in any other manner, except for any pre-existing lien(s) identified in
<br />Section 5(Schedule of Existing Debt) of the Project Summary, which sets forth
<br />the position of the lien created by this contract in relation to any existing lien(s).
<br />Documentation establishing the relative priorities of said liens, if necessary, is
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