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C. The STATE and the BORROWER mutually agree as follows: 1. Designated agent of the STATE. The CWCB, which includes its agents and employees, IS hereby designated as the agent of the STATE for the purpose of this contract. 2. Contract is not assignable. This contract is not assignable by the BORROWER except with the prior written approval of the STATE. 3. Contract relationship. The parties to this contract intend that the relationship between them contemplated by this contract is that of lender-borrower, not employer-employee. No agent, employee, or servant of the BORROWER shall be, or shall be deemed to be, an employee, agent, or servant of the STATE. The BORROWER shall be solely and entirely responsible for its acts and the acts of its agents, employees, servants, engineering firms, construction firms, and subcontractors during the performance of this contract. 4. Complete integration of all understandings. This agreement is intended as the complete integra!ion of all understandings between the parties. No prior or contemporaneous addition, deletion, or other amendment hereto shall have any force or effect whatsoever unless embodied herein in writing. No subsequent novation, renewal, addition, deletion, or other amendment hereto shall have any force or effect unless embodied in a written contract executed and approved pursuant to STATE fiscal rules. 5. Eligible expenses. PROJECT costs eligible forfinanci'DAt~I-i-1arE shall be limited to the following: Cft.I..LI a. Preparing tb.e feasibility study. INFULI~i b. Preparing final designs and specifications for the PROJECT. c. Preparing'bidand construction contract documents. d. Preparing environmental assessment or environmental impact statements, and otherwise complying with the Federal National Environmental Policy Act. e. Complying with all federal, state, and local regulatory requirements, including the obtaining of all required permits. f. Fish and wildlife mitigation measures required by federal, state, or local laws and regulations. g. Actual construction as called for in the design documents and in change orders approved by the STATE, the BORROWER, the CONSULTANT and the CONSTRUCTION FIRM. h. Engineering services for construction management, including design and construction management for STATE-approved change orders. i. Legal services for reviewing engineering services contracts, reviewing this contract, reviewing construction contract documents, and for complying with all federal, state, and local regulatory requirements. Legal services must be approved by the STATE in writing to be eligible for payment by the STATE. 6. STATE may release contract at its option. In its sole discretion, the STATE may at any time give any consent, deferment, subordination, release, satisfaction, or termination of any or all of the Windsor Reservoir and Canal Company Page 8 of 1 2 Loan Contract