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<br />, <br /> <br />and evidencing this debt is attached as Appendix C and incorporated herein, <br /> <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 /> <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 /> <br />7. Warranties. <br /> <br />a, The DISTRICT and the BORROWER warrant that by acceptance of the loan money pursuant to <br />the terms of this contract and by their representations herein, the DISTRICT and the <br />BORROWER shall be estopped from asserting for any reason that they are not authorized or <br />obligated to repay the loan money to the STATE as required by this contract <br /> <br />b, The DISTRICT and the BORROWER warrant that they have.full power and authority to enter into <br />this contract The execution and delivery of this contract and the performance and <br />observation of its terms, conditions and obligations have been duly authorized by all <br />necessary actions of the DISTRICT and the BORROWER, <br /> <br />c, The DISTRICT and the BORROWER warrant that they have not employed or retained any <br />company or person, other than a bona fide employee working solely for the BORROWER, to <br />solicit or secure this contract and have not paid or agreed to pay any person, company, <br />corporation, individual, or firm, other than a bona fide employee, any fee, commission, <br />percentage, gift, or other consideration contingent upon or resulting from the award or the <br />making of this contract <br /> <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 S 37- <br />45,1-101, et sea" C.RS" 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 /> <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 /> <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 estabiished 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 /> <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 /> <br />Feasibility Report Loan Contract <br /> <br />Page 3 of 8 <br />