Section 675IAC12-14-4. Loan terms and conditions

   (a) Upon approval of the application by the office and before delivery of the loan proceeds, the qualified entity, by its designated officers, shall execute a promissory note, a loan and security agreement, and such other documents as are necessary to ensure that the transaction is legal, valid, binding, and enforceable.

  (b) The terms and conditions of the promissory note and loan and security agreement shall include, but not be limited to, the following:

(1) A covenant as to the exclusive purpose of the loan pursuant to IC 22-14-5-9(1) [IC 22-14-5 was repealed by P.L.107-2007, SECTION 18, effective July 1, 2007.].

(2) The grant to the office by the qualified entity of a security interest in the equipment and apparatus purchased with the loan proceeds, for the balance of the loan, accrued interest, penalties, and collection expenses.

(3) A repayment period not to exceed seven (7) years.

(4) An interest rate set by the board of finance that is not more that two percent (2%) below the prime bank lending rate prevailing on the date the loan was approved by the office.

(5) If any deferral of principal is allowed, such period shall not exceed two (2) years.

(6) If repayment is limited to a specific revenue source of the qualified entity, the repayment shall not be a general obligation of the qualified entity and shall be payable solely from the specified revenue source.

(7) There shall be no prepayment penalty for payment of the loan sooner than required by the terms of the promissory note.

(8) The amount and frequency of the installment payments, including the principal and interest, together with the address to which the payments are to be delivered.

(9) One (1) or more covenants with respect to the qualified entity's continuing obligation to provide the following to the office:

(A) Signed purchase orders and other documentation evidencing the qualified entity's obligation to purchase the equipment and apparatus that is to be purchased with the loan proceeds.

(B) Canceled checks or other documentation evidencing payment by the qualified entity to the seller of the equipment and apparatus that is to be purchased with the loan proceeds.

(C) Delivery receipts and other documentation, including, where applicable, motor vehicle title documentation, evidencing the receipt by the qualified entity of the equipment and apparatus that is to be purchased with the loan proceeds.

(10) Such representations and warranties as may be necessary to ensure that the promissory note and the loan and security agreement are legal, valid, binding, and enforceable.

(Fire Prevention and Building Safety Commission; 675 IAC 12-14-4; filed May 29, 1997, 2:40 p.m.: 21 IR 396; readopted filed Sep 11, 2001, 2:49 p.m.: 25 IR 530; readopted filed Sep 21, 2007, 9:20 a.m.: 20071010-IR-675070388RFA; readopted filed Oct 10, 2007, 9:16 a.m: 20071031-IR-675070388RFA; readopted filed Aug 8, 2012, 8:08 a.m.: 20120905-IR-675120260RFA)