(a) Loan to Qualified Nonprofit. The VIHDFC may enter into a loan agreement, lease, instalment sale agreement, or similar financing arrangement with a Qualified Nonprofit, under which bond proceeds are loaned, leased, or otherwise made available to the Qualified Nonprofit to carry out the approved project.
(b) Obligations of the Nonprofit. The Qualified Nonprofit shall:1. Repay the loan in amounts and at times sufficient to pay all principal, interest, and expenses of the bonds;2. Provide collateral or security acceptable to the VIHDFC;3. Pay the Government of the Virgin Islands an issuance fee determined by the VIHDFC at financial close and an annual service fee until the bonds are redeemed;4. Maintain the hotel development project in good repair and first-class condition throughout the term of the bonds;5. Transmit quarterly unaudited and annual audited financial statements to the VIHDFC;6. Maintain its tax-exempt status under Section 501(c)(3) of the Internal Revenue Code;7. Comply with all applicable federal tax regulations governing tax-exempt bonds; and8. Indemnify the VIHDFC against any liability, loss, or expense arising from the project or the financing.
1. Repay the loan in amounts and at times sufficient to pay all principal, interest, and expenses of the bonds;
2. Provide collateral or security acceptable to the VIHDFC;
3. Pay the Government of the Virgin Islands an issuance fee determined by the VIHDFC at financial close and an annual service fee until the bonds are redeemed;
4. Maintain the hotel development project in good repair and first-class condition throughout the term of the bonds;
5. Transmit quarterly unaudited and annual audited financial statements to the VIHDFC;
6. Maintain its tax-exempt status under Section 501(c)(3) of the Internal Revenue Code;
7. Comply with all applicable federal tax regulations governing tax-exempt bonds; and
8. Indemnify the VIHDFC against any liability, loss, or expense arising from the project or the financing.
(c) Transfer to the Government of the U.S. Virgin Islands. For the issuance of bonds secured by hotel development projects, the owner shall transfer fully unencumbered and fee-simple ownership interest to the Government upon repayment of all bonds, the issuance documents shall contain covenants providing for the following:(1) All net revenues, after payment of debt service, operating expenses and reserve deposits must be applied to early redemption of bonds. No private equity disbursements are permitted.(2) If the hotel is sold prior to final maturity of the bonds, all net proceeds from such sale after repayment of the bonds and costs related thereto, will be transmitted to the Government;(3) The owner shall make good faith efforts to obtain and maintain insurance in amounts sufficient to repair or replace the property in the event of casualty, including windstorm and flood coverage.(4) If the insurance is not available, the owner shall provide written proof of denial of coverage to the subsidiary.(5) The reserve fund shall be capitalized at the closing of financing to cover annual insurance deductibles, ensuring that any insurance claims arising during the coverage period or during the bond term can be fully satisfied. This requirement shall remain in effect until the final transfer of the property to the Government of the Virgin Islands.(6) Property Insurance proceeds must be used solely to restore, rebuild, or replace the Project.(7) Failure to commence reconstruction within 12 months after a casualty constitutes a material breach triggering:(a) appointment of a receiver; and(b) immediate transfer of operational control to the Government or its designee.
(1) All net revenues, after payment of debt service, operating expenses and reserve deposits must be applied to early redemption of bonds. No private equity disbursements are permitted.
(2) If the hotel is sold prior to final maturity of the bonds, all net proceeds from such sale after repayment of the bonds and costs related thereto, will be transmitted to the Government;
(3) The owner shall make good faith efforts to obtain and maintain insurance in amounts sufficient to repair or replace the property in the event of casualty, including windstorm and flood coverage.
(4) If the insurance is not available, the owner shall provide written proof of denial of coverage to the subsidiary.
(5) The reserve fund shall be capitalized at the closing of financing to cover annual insurance deductibles, ensuring that any insurance claims arising during the coverage period or during the bond term can be fully satisfied. This requirement shall remain in effect until the final transfer of the property to the Government of the Virgin Islands.
(6) Property Insurance proceeds must be used solely to restore, rebuild, or replace the Project.
(7) Failure to commence reconstruction within 12 months after a casualty constitutes a material breach triggering:(a) appointment of a receiver; and(b) immediate transfer of operational control to the Government or its designee.
(a) appointment of a receiver; and
(b) immediate transfer of operational control to the Government or its designee.
(d) The issuance shall not be a general obligation of the VIHDFC, the Issuer, the Government of the Virgin Islands or the United States of America.”
(e) Tax Compliance Certificates. The Qualified Nonprofit shall execute all certificates necessary to maintain the tax-exempt status of the bonds.
(f) Continuing Disclosure. The Qualified Nonprofit shall comply with continuing disclosure requirements under SEC Rule 15c2-12, unless otherwise exempted.
(g) Maintenance of 501(c)(3) Status. Loss of the 501(c)(3) status shall constitute an event of default under the loan agreement and shall require immediate remedial action or, if directed by the bondholders, immediate repayment of the bonds.
(h) Financial reporting. The qualified nonprofit shall transmit quarterly unaudited and annual audited financial statements to the VIHDFC;
(i) Property Assessments. A property condition assessment shall be conducted every five years during the bond term by a competent, independent third-party entity at the cost of the qualified non-profit and such property condition assessment shall be transmitted to the Legislature and the VIHDFC. Such assessment shall be completed and transmitted within 180 days after each five-year period.