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and evidencing this debt is attached as Appendix C and incorporated herein. <br /> a. Interest During Study Period. As the loan funds are disbursed by the STATE to the <br /> BORROWER during the study period, interest shall accrue at the rate of 3.5%. The amount of <br /> the interest accrued during the study period shall be calculated by the STATE and the <br /> BORROWER shall repay that amount to the STATE either within ten (10) days after the date the <br /> STATE accepts the completed STUDY, or, at the STATE'S discretion, the amount shall be <br /> deducted from the final disbursement of loan funds that the STATE makes to the BORROWER. <br /> b. Final loan amount. In the event that the BORROWER does not borrow the full $75,000, the <br /> STATE shall issue to the BORROWER a refund in the amount of the loan funds not borrowed <br /> when the STATE cashes the CD Account for the DISTRICT'S first annual payment of the <br /> Promissory Note. <br /> 7. Warranties. ' <br /> a. The DISTRICT and the BORROWER warrant th .n acce• ;; e of the loan money pursuant to <br /> the terms of this contract and by their -'4;! ,:n,gtatio herein, the DISTRICT and the <br /> �� <br /> BORROWER shall be estopped from asse • forte . :'•n that they are not authorized or <br /> obligated to repay the loan money to th• qs re••+ -d by this contract. <br /> b. The DISTRICT and the BORROWER warrant that e full power and authority to enter into <br /> this contract. The execution a •-livery of '`is contract and the performance and <br /> observation of its terms, conditio •a�{" tions have been duly authorized by all <br /> necessary actions of the DISTRICT an• IM e .-`.'•WER. <br /> c. The DISTRICT and the Bo- war , that they have not employed or retained any <br /> company or person, othe a=ona fi• - employee working solely for the BORROWER, to <br /> solicit or secure this co have not paid or agreed to pay any person, company, <br /> corporation, individual, or fir , ,<< han a bona fide employee, any fee, commission, <br /> percentage, gift, or other consider=' •n contingent upon or resulting from the award or the <br /> making of this contract. <br /> d. The DISTRICT and the BORROWER warrant that the Dolores Water Conservancy District Water <br /> Activity Enterprise is an enterprise legally created and maintained in compliance with § 37- <br /> 45.1-101, et seq., C.R.S., and Article X, Section 20 of the Colorado Constitution, and has <br /> authority to enter into this contract with the STATE. The BORROWER and/or the DISTRICT shall <br /> immediately notify the STATE in writing if the circumstances which formulate the basis of this <br /> warranty change. <br /> e. The DISTRICT and the BORROWER warrant that the property identified in the Collateral <br /> Provisions of this contract is not encumbered by any other liens of any party other than the <br /> STATE or in any other manner. <br /> 8. Collateral. The security provided for this loan shall be an undivided one hundred percent (100%) <br /> interest in the principal of five (5) certificate of deposit accounts established by the DISTRICT <br /> and/or the BORROWER in the name of the State, each in the amount of $16,611.10, hereinafter <br /> referred to as CD ACCOUNTS. The STATE shall use the funds contained in the CD ACCOUNTS for <br /> the purpose of paying principal and interest due under this contract in accordance with the terms <br /> of the Promissory Note. <br /> 9. Collateral During Repayment. The DISTRICT and the BORROWER shall not sell, convey, assign, <br /> grant, transfer, mortgage, pledge, encumber, or otherwise dispose of the CD Accounts, or any <br /> portion thereof , so long as any of the principal and any accrued interest required by the <br /> Feasibility Report Loan Contract Page 3 of 8 <br />