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60 days of the due date as described in paragraph 5 of this Contract, or the Borrower is at any time in arrears to the State in an amount equal to one annual installment payment under this Contract. However, the State shall not take possession of Platoro Dam and Reservoir if the Borrower's default in payment is caused by an order of the Colorado State Engineer, prohibiting storage and release of water from Platoro Reservoir pursuant to the Rio Grande Compact. If the State does take possession of Platoro Dam and Reservoir pursuant to this Contract, the State may repair, maintain and operate it by itself, by hiring others to operate the Project, and/or by leasing or assigning its rights to operate, maintain, repair and replace the Project. The State agrees to operate, maintain, repair and replace Platoro Dam and Reservoir consistent with the Repayment Contract and all other contracts and agreements affecting Platoro Dam and Reservoir. The State's possession and use of the Project facilities shall be consistent with the Project purposes, to assure that beneficiaries within the Conejos Water Conservancy District boundaries will continue to be served by the Project, while allowing the State to satisfy the Borrower's repayment obligations pursuant to this Project Contract. The State further agrees to cooperate with the Borrower to help the Borrower regain competency to operate the Project, and to return possession and control of the Project to the Borrower as soon as possible after the default has been cured and the Borrower reasonably demonstrates that the Borrower is competent to operate, maintain, repair and replace the Project consistent with this Contract. 14. After the.Borrower has completely repaid the State all moneys covered by this Contract, the State will relinquish or convey to the Borrower in a manner permitted by law all of the State's right, title and interest in and to the Platoro Dam and Reservoir Project, including possession of the Project facilities, revenues, reserve escrow account, security agreement and insurance coverage described herein. 15. The Borrower warrants that each entity has full power and authority to enter into this Contract. The execution and delivery of this Contract and the performance and observation of its terms, conditions and obligations have been duly authorized by all necessary actions of the Borrower. 16. The Borrower warrants that by accepting a loan pursuant to the terms of this Contract and by the Borrower's representations made herein, the Borrower shall be estopped from asserting for any reason that it is not authorized or obligated to repay the loan pursuant to the terms of this Contract to the State. 17. The Contractor shall provide the State with such perio3ic reports as the State may require and permit periodic inspections of its operations and accounts by a designated representative of the State qualified in the area in which such inspection is being made. FQ