(1)  A loan recipient must agree that the production or manufacturing of the new agricultural product shall occur in the state and should production or manufacturing be located out-of-state, the loan recipient shall immediately reimburse the council for its original investment with the current rate of interest.

(2)  The council may determine that a loan recipient is not complying with the agricultural development project loan agreement if:

(a)  the loan recipient has not complied with the terms and conditions of the loan agreement,

(b)  commercial production, marketing or distribution of the product is not commenced by the company within a reasonable time;

(c)  the company fails to use its best efforts to achieve the benefits of increased employment in Montana; or

(d)  the company fails to maintain such offices or facilities in Montana.

(3)  If the council determines that a loan recipient is not complying with the term and conditions of the loan, the council may terminate funding of the loan.