<br />capacity and in accordance with all pertinent statutes, rules and regulations, and operational
<br />guidelines to all persons in the BORROWER'S service area without discrimination as to race, color,
<br />religion, or national origin at reasonable charges (including assessments or fees), whether for one or
<br />more classes of service, in accordance with a schedule of such charges formally adopted by the
<br />BORROWER, as may be modified from time to time.
<br />
<br />B, The STATE agrees as follows:
<br />
<br />1, Agreement To Loan Money. The STATE agrees to loan to the BORROWER an amount not to exceed
<br />that specified in the Promissory Note Provisions of this contract.
<br />
<br />2. Disbursements. After receipt of the periodic progress report from the BORROWER, and review and
<br />acceptance of the items therein as eligible expenses as described below, the STATE will pay to the
<br />BORROWER the amount set forth in the report or such portion that has been approved by the STATE,
<br />Such payment shall be made within thirty (30) days from the STATE'S approval of each progress
<br />report,
<br />
<br />3. Release After Loan Is Repaid. Upon complete repayment to the STATE of the entire principal, all
<br />accrued interest, and late charges, if any, as speCified in the promissory note, the STATE agrees to
<br />execute releases of the security agreements and the Assignment of Deposit Account as
<br />Security to convey to the BORROWER all of the STATE'S right, title, and interest in and to the
<br />security provided for this loan, to file a UCC-3 form with the Secretary of State to terminate
<br />all of the STATE'S rights in and to the security provided for this loan, and to release to the
<br />BORROWER any unused funds contained in the CD ACCOUNT,
<br />
<br />C. The STATE and the BORROWER mutually agree as follows:
<br />
<br />1. Designated Agent Of The STATE. The CWCB, which includes its agents and employees, is hereby
<br />designated as the agent of the STATE for the purpose of this contract.
<br />
<br />2. Contract Is Not Assignable. This contract is not assignable by the BORROWER except with the prior
<br />written approval of the STATE,
<br />
<br />3. Contract Relationship. The parties to this contract intend that the relationship between them
<br />contemplated by this contract is that of lender-borrower, not employer-employee. No agent,
<br />employee, or servant of the BORROWER shall be, or shall be deemed to be, an employee, agent, or
<br />servant of the STATE. The BORROWER shall be solely and entirely responsible for its acts and the
<br />acts of its agents, employees, servants, engineering firms, construction firms, and subcontractors
<br />during the performance of this contract.
<br />
<br />4, Complete Integration Of All Understandings. This agreement is intended as the complete
<br />integration of all understandings between the parties. No prior or contemporaneous addition,
<br />deletion, or other amendment hereto shall have any force or effect whatsoever unless embodied
<br />herein in writing, No subsequent novation, renewal, addition, deletion, or other amendment hereto
<br />shall have any force or effect unless embodied in a written contract executed and approved pursuant
<br />to STATE fiscal rules, with the exception of the Revision Letter as described in the Changes Provision
<br />of this contract.
<br />
<br />5. In Event Of A Conflict. In the event of conflict between the terms of this contract and conditions as
<br />set forth in any of the appendices, the provisions of this contract shall control.
<br />
<br />6. Eligible Expenses. PROJECT costs eligible for financing by the STATE shall be limited to the cost of:
<br />
<br />Farmers Pawnee Canal Company
<br />
<br />Page 8 of 13
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<br />Loan Contract
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