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SECTION 6 - ELIGIBLE EXPENSES. The following items are eligible for loan disbursements. A. Preparing final designs and specifications for the PROJECT. B. Preparing bid and construction contract documents. C. Preparing environmental assessment or environmental impact statements, and otherwise complying with the Federal National Environmental Policy Act. D. Complying with all federal, state, and local regulatory requirements, including the obtaining of all required permits. E. Fish and wildlife mitigation measures required by federal, state, or local laws and regulations. F. Actual construction as called for in the design documents and in change orders approved by the CWCS and the BORROWER. G. Engineering services for construction management, including design and construction management for CWCB-approved change orders. H. Interest during completion of the PROJECT pursuant to Paragraph A.3 herein. 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. SECTION 7 - DISBURSEMENT SCHEDULE The BORROWER shall prepare a periodic progress report which contains a statement of the PROJECT costs expended for that period and shall forward said statement to the CWCB. After receipt of the periodic progress report from the BORROWER, and review and acceptance of the items therein as eligible expenses as described below, the CWCB will pay to the BORROWER the amount set forth in . the report or such portion that has been approved by the CWCS. Such payment shall be made within thirty (30) days from the CWCB's approval of each progress report. SECTION 8- TIME FOR PERFORMANCE Project Beginning: Upon effective date of this contract Project Finish: 1 year from date of this contract SECTION 9 -ADDITIONAL CONTRACT REQUIREMENTS Not Applicable Project Summary - Tilton Lateral, Inc. Page 3 of 3