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<br />adjusting additional assessments to raise sufficient revenue to assure repayment of the loan
<br />to the STATE.
<br />
<br />e. Levy assessments for operations, maintenance, reserves, and debt reserves. The
<br />BORROWER shall, pursuant to the statutes, its articles of incorporation, by-laws, and
<br />resolutions, levy assessments from time to time as necessary to provide sufficient funds for
<br />adequate operation and maintenance, emergency repair services, obsolescence reserves, and
<br />debt reserves,
<br />
<br />11. Progress reports. The Borrower shall, with the assistance of the CONSULTANT, prepare a
<br />progress report which contains a statement of the actual PROJECT construction costs expended for
<br />that month and shall forward said statement to the STATE,
<br />
<br />12. Periodic inspections. The BORROWER shall permit the STATE to make periodic inspections of
<br />its operations and accounts by a designated representative of the STATE, Any such inspections by
<br />the STATE are solely for the purpose of verifying compliance with the terms and conditions of the
<br />contract and shall not be construed nor interpreted as an approval of the actual design and/or
<br />construction of any element of the PROJECT,
<br />
<br />13, Adhere to applicable laws. The BORROWER shall strictly adhere to all applicable federal, state,
<br />and local laws and regulations that have been or may hereafter be established.
<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
<br />exceed that specified in the promissory note provisions of this contract,
<br />
<br />2, Disbursements, After receipt of the monthly progress report from the BORROWER, and review
<br />and acceptance of the items therein as eligible expenses as described below, the STATE will pay to
<br />the BORROWER the amount of the report or such portion that has been approved by the STATE. Such
<br />payment shall be made within thirty (30) days from the approval of each monthly progress report.
<br />
<br />3. Release after loan is repaid. Upon completion of repayment to the STATE of the entire principal
<br />and any accrued interest as specified in the promissory note provisions of this contract, the STATE
<br />agrees to execute a release of deed of trust to convey to the BORROWER all of the STATE'S right, title,
<br />and interest in and to the PROJECT and any other property described in Appendix B,
<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, employee, or
<br />servant of the BORROWER shall be, or shall be deemed to be, an employee, agent, or servant of the STATE, The
<br />BORROWER will be solely and entirely responsible for its acts and the acts of its agents, employees, servants,
<br />engineering firms, construction firms, and subcontractors during the performance of this contract.
<br />
<br />ELMWOOD LATERAL DITCH COMPANY
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<br />LOAN CONTRACT
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