Common use of SSBCI PROGRAM REQUIREMENTS Clause in Contracts

SSBCI PROGRAM REQUIREMENTS. Obligations of the Rural Center will cease immediately without penalty or further payment being required if the Allocated Funds for the Program are no longer available (whether they have all been otherwise utilized or the Rural Center no longer has access to them). The Rural Center and the Lender acknowledge that the Program will be funded, in whole or in part, by State Small Business Credit Initiative Program funds, as available, and as such, both the Rural Center and the Lender agree that the use of funds pursuant to this Agreement shall be governed by, and not be in derogation of, any rules, regulations, or guidelines for the Program promulgated or issued by the US Treasury or the State of North Carolina. As to each Loan in which the Rural Center purchases a Participation, the Lender agrees that it will have determined that all of the following are true and correct: A. The proceeds of the Loan will not be used: i. to repay delinquent federal or state income taxes unless the Borrower has a payment plan in place with the relevant taxing authority; ii. to repay taxes held in trust or escrow (e.g., payroll or sales taxes); iii. to reimburse funds owed to any owner of the Borrower, including any equity injection or injection of capital for the Borrower's continuance; iv. to purchase any portion of any ownership interest in the Borrower; v. for activities that relate to acquiring or holding passive investments, such as commercial real estate ownership and the purchase of securities; and lobbying activities, as defined in Section 3(7) of the Lobbying Disclosure Act of 1995, P.L. 104-65, as amended; or vi. to refinance a loan previously made to the Borrower by the Lender; B. No principal of the Borrower or the Lender has been convicted of a sex offense against a minor (as such terms are defined in Section 111 of the Sex Offender Registration and Notification Act (42 U.S.C. § 16911)); C. The Lender is in material compliance with all federal and state laws, rules, and regulations pertaining to the making of loans (including 31 C.F.R. § 103.121); D. The Borrower is ready to implement the Project and has the financial ability to carry out the Project; E. The Borrower is responsible and creditworthy; F. The Loan is protected by security, which may include, as available, first or second mortgage positions on real or personal property, royalty payments on sales of products or services, or any other security satisfactory to the Lender to secure repayment of the Loan. Personal notes or guaranties have been executed by persons owning more than twenty (20) percent of the Borrower; G. The Loan Documents are in an amount and form, and contain such terms and provisions with respect to property insurance, repairs, alterations, payment of taxes and assessments, delinquency charges, default remedies, additional security, and other matters, adequate to protect the State’s interest in ensuring repayment; ▇. ▇▇▇▇▇▇▇▇▇▇ are responsible and creditworthy. Guarantors’ assets have been verified and will undergo periodic review both to ensure their continuing capacity to provide performance guaranties in the amounts required to ensure repayment, and to ensure that the same assets have not been pledged or are supporting other loans or guaranties.

SSBCI PROGRAM REQUIREMENTS. Obligations of the Rural Center will cease immediately without penalty or further payment being required if the Allocated Funds for the Program are no longer available (whether they have all been otherwise utilized or the Rural Center no longer has access to them). The Rural Center and the Lender acknowledge that the Program will be funded, in whole or in part, by State Small Business Credit Initiative Program funds, as available, and as such, both the Rural Center and the Lender agree that the use of funds pursuant to this Agreement shall be governed by, and not be in derogation of, any rules, regulations, or guidelines for the Program promulgated or issued by the US Treasury or the State of North Carolina. As to each Loan in which the Rural Center purchases a Participation, the Lender agrees that it will have determined that all of the following are true and correct: A. The proceeds of the Loan will not be used: i. to repay delinquent federal or state income taxes unless the Borrower has a payment plan in place with the relevant taxing authority; ii. to repay taxes held in trust or escrow (e.g., payroll or sales taxes); iii. to reimburse funds owed to any owner of the Borrower, including any equity injection or injection of capital for the Borrower's continuance; iv. to purchase any portion of any ownership interest in the Borrower; v. for activities that relate to acquiring or holding passive investments, such as commercial real estate ownership and the purchase of securities; and lobbying activities, as defined in Section 3(7) of the Lobbying Disclosure Act of 1995, P.L. 104-65, as amended; or vi. to refinance a loan previously made to the Borrower by the Lender; B. No principal of the Borrower or the Lender has been convicted of a sex offense against a minor (as such terms are defined in Section 111 of the Sex Offender Registration and Notification Act (42 U.S.C. § 16911)); C. The Lender is in material compliance with all federal and state laws, rules, and regulations pertaining to the making of loans (including 31 C.F.R. § 103.121); D. The Borrower is ready to implement the Project and has the financial ability to carry out the Project; E. The Borrower is responsible and creditworthy; F. The Loan is protected by security, which may include, as available, first or second mortgage positions on real or personal property, royalty payments on sales of products or services, or any other security satisfactory to the Lender to secure repayment of the Loan. Personal notes or guaranties have been executed by persons owning more than twenty (20) percent of the Borrower; G. The Loan Documents are in an amount and form, and contain such terms and provisions with respect to property insurance, repairs, alterations, payment of taxes and assessments, delinquency charges, default remedies, additional security, and other matters, adequate to protect the State’s interest in ensuring repayment; ▇. ▇▇▇▇▇▇▇▇▇▇ H. Guarantors are responsible and creditworthy. Guarantors’ assets have been verified and will undergo periodic review both to ensure their continuing capacity to provide performance guaranties in the amounts required to ensure repayment, and to ensure that the same assets have not been pledged or are supporting other loans or guaranties.