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<br />deposit an amount equal to one-tenth of an annual payment into its debt service reserve fund <br />one year from the first loan disburseme~t, and annually thereafter for the first ten years of this <br />loan. <br /> <br />14. Change of Use of Water Shares During Term of Contract. The BORROWER agrees to notify the <br />STATE of any change of the use of the water rights represented by its shares from irrigation to <br />municipal or commercial use, at which time the STATE shall adjust the interest rate on that portion <br />of the outstanding loan amount corresponding to the percentage of shares for which the use has <br />been changed to the CWCB's municipal or commercial rate in effect at the time of the change of <br />use of the water rights. The parties shall e,:ecute a contract amendment to effect said change in <br />interest rate. <br /> <br />15.Collateral During Repayment. The BORROWER shall not sell, convey, assi9n, grant, transfer, <br />mortgage, pledge, encumber, or otherwise dispose of the property provided as security for <br />this loan, so long as any of the principal, 011 accrued interest, and late charges, if any, on this <br />loan remain unpaid, without the prior written concurrence of the STATE. In the event of any <br />such sale, transfer or encumbrance withotJt the STATE'S written concurrence, the STATE may <br />at any time thereafter declare all outstanding principal and interest on this loan immediately <br />due and payable. <br /> <br />16. Remedies For Default. Upon default in the payments herein set forth to be made by the <br />BORROWER, or default in the performance pf 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. take possession of the PROJECT facilities, repair, maintain, and operate or lease them; <br /> <br />d. exercise its rights under the PromissorY Note, Security Agreement, Assignment Of Deposit <br />Account As Security and Deed Of Trust, <br /> <br />e. apply the funds contained in the Deposit Account to the repayment of the loan; <br /> <br />f. take any other appropriate action. <br /> <br />All remedies described herein may be simulwneously 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 />17. 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 />Leroux Creek Water Users' Association <br /> <br />Page 7 of 13 <br /> <br />Loan Contract <br />