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<br />provisions in the BORROWER'S articles of incorporation or by-laws or any state or local law that prevent <br />this contract from binding the BORROWER; and that the contract will be valid and binding against the <br />BORROWER if entered into by the STATE. <br /> <br />9. Promissory Note Provisions. The BORROWER understands that this contract is also a promissory <br />note for the repayment of funds loaned according to the terms set forth herein. <br /> <br />a. Principal Amount. The principal amount of the loan shall be the total amount of funds disbursed <br />by the STATE to the BORROWER under the terms of this contract, not to exceed $17,450. <br /> <br />b. Interest Rate. The interest on the principal shall accrue at the rate of 3.25% per annum on all <br />funds disbursed to BORROWER. <br /> <br />C. Duration. The repayment period of this loan shall be ten (10) years. <br /> <br />d. Loan Payment. The payments shall be 10 annual installments of $2,071.86, which amount <br />includes principal and interest. The first installment shall be due and payable one year after the <br />STATE determines that the PROJECT has been substantially completed, and annually thereafter <br />until the entire principal sum and any accrued interest shall have been paid. Installment payments <br />are to be made payable to the CWCB at the address given below. <br /> <br />e. Interest During Study Period. Interest shall accrue at the rate of 3.25% on the funds that are <br />disbursed by the STATE to the BORROWER while the feasibility study is being prepared. The <br />amount of the interest accrued during 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 final STuDY, at the STATE'S discretion, the amount shall be deducted from the <br />final disbursement of loan funds that the STATE makes to the BORROWER. <br /> <br />f. Prepayment Conditions. The BORROWER may prepay all or any of the loan at any time, without <br />penalty. These payments will be applied first to any accrued interest and then to reduce the <br />principal amount. <br />g. Collection Costs. If the principal or accrued interest under this contract is not paid when due, the <br />BORROWER agrees to pay all reasonable costs of collection, including reasonable attomey fees. <br />In the event of any bankruptcy or similar proceedings, costs of collection shall include all .costs <br />and attomey fees incurred in .connection with such proceedings, including the fees of counsel for <br />attendance at meetings of creditors' committees or other committees. <br /> <br />12. Warranties. <br /> <br />a. The BORROWER warrants that by acceptance of the loan money pursuant to the terms of this <br />contract and by the BORROWER'S representation herein, the BORROWER shall be estopped from <br />asserting for any reason that it is not authorized or obligated to repay the loan money to the STATE <br />as required by this contract. <br /> <br />b, The BORROWER warrants that it has full power and authority to enter into this contract. The <br />execution and delivery of this contract and the performance and observation of its terms, <br />conditions and obligations have been duly authorized by all necessary actions of the BORROWER. <br /> <br />c, The BORROWER warrants that it has not employed or retained any company or person, other than <br />a bona fide employee working solely for the BORROWER, to solicit or secure this contract and has <br />not paid or agreed to pay any person, company, corporation, individual, or firm, other than a bona <br />fide employee, any fee, commission, percentage, gift, or other consideration contingent upon or <br /> <br />n~__ ? _~ 0 <br />