§ 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.