; (ii) taxpayer protection; and (iii) the need to ensure ample funding for clinical trials described in section 2; (C) in accordance with paragraph (2), to establish an upfront fee of not greater than 1 percent of each loan principal amount at origination to cover administrative and financing costs associated with the loans eligible for purchase under this section; and (D) to permit the use of warrants and similar instruments with respect to loans that are eligible for purchase under this section, where necessary to protect taxpayer interests. (2) Fees (A) In general Fees established under paragraph (1)(C) shall be financed by addition of the appropriate amount reflecting each upfront fee to the balance of each loan upon origination and shall be collected in concert with all loan payments collected by the fiscal agent. (B) Requirement If a loan is repaid ahead of its stated maturity, becomes delinquent, or defaults, then the full unpaid balance of a fee established under paragraph (1)(C) that remains at such time shall be added to the principal that must be fully satisfied. 4. BioBonds (a) Issuance Each fiscal agent that purchases a loan under section 3 shall issue bonds, to be known as BioBonds , collateralized by such loans, and sell the BioBonds to investors. (b) BioBond guarantee The Secretary of the Treasury shall provide a guarantee of not greater than 90 percent of the payment of principal (but not the payment of interest) for a BioBond. (c) Auctions The Secretary of the Treasury may— (1) authorize fiscal agents to use an auction to select the purchasers of BioBonds