A. Loans must be
secured by collateral having a fair market value (ordinarily determined by
appraisal) sufficient to provide adequate security for the loan. The Authority
may, in the reasonable exercise of its judgment, require assignments of leases
or contracts in favor of the Loring Development Authority or one or more
trustees acting on behalf of the bondholders, as applicable, secured or
unsecured personal or corporate guarantees, and letters of credit.
B. Any project approved for a Certificate of
Approval shall include covenants requiring the borrower to:
1. Make periodic payments of principal and
interest;
2. Pay any taxes and
governmental charges assessed against the borrower or the collateral;
3. Comply with all applicable federal, state
and local laws, regulations and ordinances;
4. Make any lease payments imposed on
borrower in connection with the project;
5. Obtain, maintain and pay for insurance
against damage to or loss of the collateral;
6. Maintain and repair the
collateral;
7. Permit the Loring
Development Authority or its agent to inspect the collateral and to inspect and
copy the borrower's books and records at any reasonable time;
8. Provide to the Loring Development
Authority periodic financial reports in form and content, at times and for
periods acceptable to the Loring Development Authority and prepared by persons
acceptable to the Loring Development Authority and also provide to the Loring
Development Authority, when specifically requested, annual income tax
returns;
9. Refrain from
transferring any interest in the collateral without the Loring Development
Authority's prior written consent;
10. Repay any advances necessary to protect
the collateral or enforce the rights of the Loring Development
Authority;
11. Execute such further
assurances as may be reasonably required;
12. Keep the collateral free from liens and
encumbrances not approved in advance in writing by the Loring Development
Authority; and
13. If the bonds are
tax-exempt, take such action as may be necessary to preserve the tax-exempt
status of the bonds.
B.
Optional Covenants.
In addition, the Authority may impose such other terms and
conditions as it may reasonably deem prudent or desirable to assure sale of
bonds at reasonable rates, completion and continuation of the project,
preservation of collateral and repayment of the bonds.
