2006 New York Code - Regulation Of Eligible Borrowers.

 
    §  410-f.    Regulation  of  eligible borrowers.   1.   Every eligible
  borrower, as a condition precedent to borrowing funds from  the  agency,
  shall  enter  into  a  regulatory  agreement with the commissioner which
  shall provide:
    (a)  that the real property or other  assets  mortgaged  or  otherwise
  pledged  to  the  agency  shall  not be sold, transferred, encumbered or
  assigned until the eligible borrower  shall  have  repaid  in  full  all
  obligations  under  the  mortgage  of the agency and has paid such other
  obligations as may be required by the  commissioner  provided,  however,
  the  provisions  of  this  paragraph  (a) shall not apply to any actions
  taken pursuant to section four hundred ten-l of this article;
    (b)  that the eligible borrower will maintain books and records and  a
  system  of  accounts  satisfactory  to  the  commissioner and the agency
  including but not limited to separate books, records  and  accounts  for
  (i)  all  monies advanced to the eligible borrower by the agency or from
  any other source or sources, public or private,  for  the  construction,
  reconstruction,  rehabilitation, improvement or equipment of the project
  and (ii) all monies repaid in satisfaction of any  indebtedness  to  the
  agency  or  other  indebtedness as required by the commissioner; and the
  eligible borrower agrees that all of its  books,  records  and  accounts
  shall  be  open to examination by the commissioner and the agency at any
  time;
    (c)  that the eligible borrower shall file with the  commissioner  and
  the  agency such financial statements including an annual report setting
  forth such information as the commissioner may require;
    (d)  that the eligible borrower shall not acquire any real property or
  interest  therein  for  the  purpose  of  constructing,  reconstructing,
  rehabilitating or improving a project without first having obtained from
  the  commissioner a certificate that such acquisition is consistent with
  the purposes of this article;
    (e)   that  the  eligible  borrower  shall  not  issue  notes,  bonds,
  debentures  or  other  obligations  other  than  for  money  or property
  actually received for the  use  and  lawful  purposes  of  the  eligible
  borrower  and  no  such  note, bond, debenture or other obligation shall
  constitute a lien or  encumbrance  against  the  project,  or  any  real
  property or other asset mortgaged or otherwise pledged to the agency;
    (f)    that  the  eligible  borrower  shall  not  without first having
  obtained the written consent of the commissioner:
    (i)  construct, reconstruct, rehabilitate, improve,  alter  or  repair
  the project or enter into a contract therefor;
    (ii)   enter into contracts relating to the management or operation of
  the project;
    (iii)  make a guaranty of payment out of monies pledged to the  agency
  or  pledge  any  or  all of its assets, income or revenue pledged to the
  agency to secure payment of its obligations;
    (iv)  lease a project or a portion thereof to a third  party  for  the
  purposes of operation;
    (v)  voluntarily dissolve;
    (g)    that no member, officer or employee of the corporation which is
  an eligible borrower shall acquire any interest, direct or indirect,  in
  any  property then or thereafter included or planned to be included in a
  project, nor retain any interest direct  or  indirect  in  any  property
  acquired  subsequent  to  his  appointment  or employment which is later
  included or planned to be included in a project.  If any member, officer
  or employee of a corporation which  is  an  eligible  borrower  owns  or
  controls  an interest, direct or indirect, in any property included in a
  project which was acquired prior to his appointment  or  employment,  he
  shall  disclose  such  interest  and  the  date  of  acquisition  to the
  corporation and such disclosure shall be entered  upon  the  minutes  of
  such  corporation  and  a copy of such minutes shall be forwarded to the
  commissioner;
    (h)    that  all income and earnings of the eligible borrower shall be
  used exclusively for its corporate purposes;
    (i)  that no part of the net income or  earnings  of  the  corporation
  shall  inure to the benefit or profit of any private individual, firm or
  corporation;
    j.  That the eligible borrower, in the case  of  a  residential  child
  care  center  project, will be subject to the visitation, inspection and
  supervision of the department, and that the eligible  borrower,  in  the
  case  of  a  day  care center project will be subject to the visitation,
  inspection and supervision of the department, as to any and all acts  in
  relation  to  the  welfare  of children to be performed pursuant to this
  title;
    (k)  such other matters as the commissioner or the agency may require;
    2.  This regulatory agreement shall terminate at any  time  after  the
  expiration of ten years after the occupancy date upon the consent of the
  commissioner and upon the repayment in full of all obligations under the
  mortgage of the agency and of such other obligations as the commissioner
  may require.