Section 2873. 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, leased, transferred, encumbered
  or  assigned  without  the  prior  consent of the commissioner until the
  eligible borrower shall have repaid in full all obligations due  to  the
  agency  and  has  paid  such other obligations as may be required by the
  commissioner provided, however, the provisions of this  paragraph  shall
  not  apply to any actions taken pursuant to section twenty-eight hundred
  seventy-nine 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  hospital  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,
  provided, however, that a hospital constituting an eligible borrower may
  incur, assume or guarantee indebtedness from a lender other than the New
  York state medical care facilities finance agency  or  incur  or  assume
  indebtedness  from  the  New  York state medical care facilities finance
  agency under a separate bond resolution pursuant to  the  provisions  of
  section  five-c  of  the  New York state medical care facilities finance
  agency act;
    (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) 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) such other matters as the commissioner or the agency may require.
    2. This regulatory agreement shall terminate at  any  time  after  the
  expiration  of  twenty  years  after the occupancy date, or such earlier
  date as the bonds issued by the agency  with  respect  to  the  hospital
  project  are subject to redemption, upon the consent of the commissioner
  and upon the repayment in full of all obligations due to the agency  and
  of such other obligations as the commissioner may require.