Sec. 32-82-2. Procedures for loans or lines of credit

(a) Application for a loan or line of credit shall be submitted on forms provided by the Department. No application shall be considered unless the exhibits and all information required by such forms are furnished.

(b) The Borrower shall pay for all costs of processing applications for loans or lines of credit to be made under this program, including closing costs, as the Commissioner determines are reasonable and necessary to pay such costs.

(c) Upon approval by the Commissioner and the Authority, the Borrower shall enter into a loan agreement which shall set forth the terms and conditions required by Section 2 of Public Act 83-580, these Regulations and any other terms and conditions applicable to the particular loan or line of credit, which may be established by the Commissioner or the Authority.

(d) Each loan agreement shall be effective only upon execution by the Commissioner and the Borrower.

(e) Such loan agreement shall provide, without limitation, that the Borrower agrees:

(1) To provide the Department with such financial and other information as the Commissioner may in his discretion require from time to time;

(2) To notify the Department promptly of any material adverse change in the financial condition or business prospects of the Borrower;

(3) To represent and warrant that it has the power and authority to enter into the loan agreement and to incur the obligations therein provided for, and that all documents and agreements executed and delivered in connection with the loan or line of credit will be valid and binding upon the Borrower enforceable in accordance with their respective terms;

(4) To provide such security for the loan or line of credit as the Commissioner may require pursuant to these Regulations and to execute and deliver all documents in connection therewith;

(5) That the funds provided will not be used otherwise than for the purpose for which the loan application was made and approved.

(6) To the extent the loan, or line of credit is secured by a contract or contracts, to:

(a) Notify the Department of the modification of any provision of a contract which is security for the loan or line of credit when said modification affects the total amount due under the contract, affects the time or manner of payment, or in any other way substantially affects the contract or the manner of performance of said contract;

(b) Notify the Department of the termination of any part of a contract or the termination of the entire contract by any party to the contract;

(c) Notify the Department of the failure of either party to a contract to perform any of its obligations under such contract;

(d) Notify the Department of the rejection of any material or article delivered in the performance of a contract;

(e) Use the funds advanced only to pay for labor and material on the pledged contract.

(Effective July 31, 1984)