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2 f <br /> 1.02 Material Representations. The Lendee agrees that all representations contained in <br /> its application for loan assistance are material representations of fact upon which the Council <br /> relied in awarding this loan and are incorporated in this agreement by reference. <br /> 1.03 Lendee Certification. Lendee certifies that the loan funds to be distributed pursuant <br /> to this agreement will be applied to the purposes stated in this agreement and that the Loan <br /> Project is cost effective. <br /> 1.04 Governing Body Resolution. Lendee-will provide the Council with a copy of a <br /> resolution by its governing body which authorizes the Lendee to enter into this agreement. <br /> IL AUTHORIZED USE OF LOAN PROCEEDS AND MATCHING FUNDS <br /> 2.01 Authorized Uses. The Lendee is authorized to use the loan funds only in payment <br /> of the line item costs specified in Exhibit B, which is attached to and incorporated in this <br /> agreement. No other use of loan funds is permitted. Loan and matching funds may be used only <br /> for costs directly associated with Loan Project activities. <br /> 2.02 Unauthorized Uses of Loan Proceeds. Loan funds cannot be used to purchase <br /> land, buildings, or other interests in real property, or to pay overhead or indirect costs, legal fees, <br /> or permit, license, or other authorization fees,unless specifically approved in advance by the <br /> Council. <br /> 2.03 Reversion of Unexpended Funds. All funds loaned by the Council under this <br /> agreement that have not been expended for the Loan Project during the Project Activity Period <br /> (as defined in section 6.01)will be repaid to the Council. <br /> 2.04 Project Equipment and Supplies. Loan and matching funds may be used to <br /> purchase or lease equipment, machinery, supplies, or other personal property directly necessary to <br /> conduct the Loan Project. The Lendee will comply with the personal property management <br /> requirements described in paragraph 7.10 of this agreement. <br /> IIL LOAN AMOUNT,DISTRIBUTION,AND REPAYMENT <br /> 3.01 Total Loan Amount. The Council will pay to the Lendee a Total Loan Amount of <br /> $40,000. Provided, however, that in no event will the Council's obligation under this agreement <br /> exceed the lesser of: <br /> a. the Total Loan Amount of$40,000; or, _ <br /> b. fifty percent(50%)of total Loan Project expenditures. <br /> The Council will bear no responsibility for cost overruns which may be incurred by the Lendee in <br /> performance of the Loan Project. ' <br />