<br />shares for which the use has been changed to the CWCB's municipal or commercial rate in
<br />effect 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 />14. Collateral During Repayment. The BORROWER shall not sell, convey, assign, grant, transfer,
<br />mortgage, pledge, encumber, or otherwise dispose of the property provided as security for this
<br />loan, so long as any of the principal, all accrued interest, and late charges, if any, on this loan
<br />remain unpaid, without the prior written concurrence of the STATE. In the event of any such
<br />sale, transfer or encumbrance without the STATE'S written concurrence, the STATE may at any
<br />time thereafter declare all outstanding principal and interest on this loan immediately due and
<br />payable.
<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
<br />and 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
<br />default, 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, Assignment Of Certificate Of Deposit, and Deed Of Trust,
<br />
<br />e, apply the funds conlained in the CD ACCOUNT to the repayment of the loan;
<br />
<br />j, take any other appropriate action.
<br />
<br />All remedies described herein may be simultaneously or selectively and successively enforced,
<br />The provisions of this contract may be enforced by the STATE at its option without regard to prior
<br />waivers of previous defaults by the BORROWER, through judicial proceedings to require specific
<br />performance of this contract, or by such other proceedings in law or equity as may be deemed
<br />necessary by the STATE to ensure compliance with provisions of this contract and the laws and
<br />regulations under which this contract is executed, The STATE'S exercise of any or all of the
<br />remedies described herein shall not relieve the BORROWER of any of its duties and obligations
<br />under this contract.
<br />
<br />16. Progress Reports. The BORROWER shall, with the assistance of the CONSULTANT, prepare a
<br />pe:icdic progress report which contains a slarement OJ the PROJECT costs expended for that
<br />period and submit 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
<br />records, maintenance records, and financial records, and shall not be construed nor interpreted as
<br />an 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
<br />term of this contract.
<br />
<br />Woodchuck Ditch Company
<br />
<br />Page 7 of 13
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