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<br />inspections are solely for the purpose of verifying compliance with the terms and conditions of this
<br />contract. Furthermore, such inspections shall cover the condition of the PROJECT, operating records,
<br />maintenance records, and financial records, and shall not be construed nor interpreted as an
<br />approval of the actual design and/or construction of any element of the PROJECT facilities.
<br />
<br />19. Adhere To Applicable Laws. The BORROWER shall strictly adhere to all applicable federal, state,
<br />and local laws and regulations that are in effect or may hereafter be established throughout the term
<br />of this contract.
<br />
<br />20. No Discrimination Of Services. The services of said PROJECT shall be made available within its
<br />capacity and in accordance with all pertinent statutes, rules and regulations, and operational
<br />guidelines to all persons in the BORROWER'S $ervice 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 ~he 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 tM 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 />
<br />Western Mutual Ditch Company
<br />
<br />Page 8 of 13
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<br />Loan Contract
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