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12. Periodic inspections. Throughout the term of this contract, the BORROWER shall permit a <br />designated representative of the STATE to make periodic inspections of the PROJECT. Such <br />inspections are solely for the purpose of verifying compliance with the terms and conditions of <br />this contract. Furthermore, such inspections shall cover the condition of the PROJECT, operating <br />records, maintenance records, and financial records, and shall not be construed nor interpreted <br />as an approval of the actual design and /or construction of any element of the PROJECT facilities. <br />13. No dissolution of water enterprise. The DISTRICT and the BORROWER agree not to <br />terminate or dissolve the BORROWER, nor adversely withdraw or deplete its assets, nor otherwise <br />adversely affect the BORROWER's ability to perform during the term of this contract. <br />14. Adhere to applicable laws. The DISTRICT and the BORROWER shall strictly adhere to all <br />applicable federal, state, and local laws and regulations that are in effect or may hereafter be <br />established throughout the term of this contract. <br />15. No discrimination of services. The services of said PROJECT shall be made available <br />within its capacity and in accordance with all pertinent statutes, rules and regulations, and <br />operational guidelines to all persons in the DISTRICT's /BORROWER'S service area without <br />discrimination as to race, color, religion, or national origin at reasonable charges (including <br />assessments or fees), whether for one or more classes of service, in accordance with a <br />schedule of such charges formally adopted by the DMZRICT, as may be modified from time to <br />time. o <br />B. The STATE agrees as follows: <br />1. Agreement to loan money. The SO4viins to the BORROWER an amount not to <br />exceed that specified in the Promissory of this contract. <br />2. Disbursements. After receipt of a written itemized request from the DISTRICT for the loan <br />funds and the STATE's review and acceptance of the items therein as eligible expenses as <br />described below, the STATE will disburse the approved amount within thirty (30) days from the <br />STATE's approval of the request. <br />3. Release after loan is repaid. Upon complete repayment to the STATE of the entire <br />principal and any accrued interest as specified in the promissory note provisions of this <br />contract, the STATE agrees to file a UCC -3 form with the Secretary of State to terminate all of <br />the STATE's rights in and to the revenues pledged to repay this loan, and to release to the <br />BORROWER any unused funds contained in the CD ACCOUNT. <br />C. The STATE and the DISTRICT and BORROWER mutually agree as follows: <br />1. Designated agent of the STATE. The CWCB, which includes its agents and employees, is <br />hereby designated as the agent of the STATE for the purpose of this contract. <br />2. Contract is not assignable. This contract is not assignable by the DISTRICT or the <br />BORROWER except with the prior written approval of the STATE. <br />3. Contract relationship. The parties to this contract intend that the relationship between <br />them contemplated by this contract is that of lender- borrower, not employer - employee. No <br />agent, employee, or servant of the DISTRICT or the BORROWER shall be, or shall be deemed to be, <br />Page 7 of 12 <br />