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<br />outstanding principal and interest on this loan immediately due and payable. <br /> <br />14. Change of Use of Water Shares During Term of Contract. The BORROWER agrees to notify the <br />STATE within ten working days after its Board of Directors issues written approval, pursuant to ' <br />Section 5 of the BORROWER'S bylaws, of any change of the use of the water rights represented by <br />its shares from irrigation to municipal or commercial use, at which time the STATE shall adjust the <br />interest rate on that portion of the outstanding loan amount corresponding to the percentage of <br />shares for which the use has been changed to the CWCB's municipal or commercial rate in effect <br />at the time of the change of use of the water rights. The parties shall execute a contract <br />amendment to effect said change in interest rate. <br /> <br />15, Remedies For Default. Upon default in the payments herein set forth to be made by the <br />BORROWER, or default in the performance of any covenant or agreement contained herein, the <br />STATE, at its option, may: <br /> <br />a. declare the entire principal amount and accrued interest then outstanding immediately due and <br />payable; <br /> <br />b. incur and pay reasonable expenses for repair, maintenance, and operation of the PROJECT <br />facilities herein described and such expenses as may be necessary to cure the cause of default, <br />and add the amount of such expenditures to the principal of the loan amount; <br /> <br />c. exercise its rights under the Promissory Note, Security Agreement, Assignment Of Deposit <br />Account As Security, and Assignment Of Certificate Of Deposit; <br /> <br />d, apply the funds contained in the CD ACCOUNT to the repayment of the loan; <br /> <br />e. take any other appropriate action. <br /> <br />All remedies described herein may be simultaneously or selectively and successively enforced. The <br />provisions of this contract may be enforced by the STATE at its option without regard to prior waivers <br />of previous defaults by the BORROWER, through judicial proceedings to require specific performance <br />of this contract, or by such other proceedings in law or equity as may be deemed necessary by the <br />STATE to ensure compliance with provisions of this contract and the laws and regulations under <br />which this contract is executed. The STATE'S exercise of any or all of the remedies described herein <br />shall not relieve the BORROWER of any of its duties and obligations under this contract. <br /> <br />16. Progress Reports. The BORROWER shall, with the assistance of the CONSULTANT, prepare a <br />periodic progress report which contains a statement of the PROJECT costs expended for that period <br />and shall forward said statement to the STATE. <br /> <br />17. 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 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 />18. 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 />19. No Discrimination Of Services. The services of said PROJECT shall be made available within its <br /> <br />Farmers Pawnee Canal Company <br /> <br />Page 7 of 13 <br /> <br />Loan Contract <br />