Page:United States Statutes at Large Volume 112 Part 1.djvu/501

 PUBLIC LAW 105-178—JUNE 9, 1998 112 STAT. 475 railroad, or railroad partner to provide rail or intermodal services in an efficient and economic manner, or would adversely affect the ability of the applicant, railroad, or railroad partner to perform any obligation entered into by the applicant under this section; "(2) will, consistent with its capital resources, maintain its capital program, equipment, facilities, and operations on a continuing basis; and "(3) will not make any discretionary dividend payments that unreasonably conflict with the purposes stated in subsection (b). "SEC. 503. ADMINISTRATION OF DIRECT LOANS AND LOAN GUARAN- 45 USC 823 note. TEES. "(a) APPLICATIONS. — The Secretary shall prescribe the form and contents required of applications for assistance under section 502, to enable the Secretary to determine the eligibility of the applicant's proposal, and shall establish terms and conditions for direct loans and loan guarantees made under that section. "(b) ASSIGNMENT OF LOAN GUARANTEES. — The holder of a loan guarantee made under section 502 may assign the loan guarantee in whole or in part, subject to such requirements as the Secretary may prescribe. "(c) MODIFICATIONS. — The Secretary may approve the modification of any term or condition of a direct loan, login guarantee, direct loan obligation, or loan guarantee commitment, including the rate of interest, time of payment of interest or principal, or security requirements, if the Secretary finds in writing that— "(1) the modification is equitable and is in the overall best interests of the United States; and "(2) consent has been obtained from the applicant and, in the case of a loan guarantee or loan guarantee commitment, the holder of the obligation. "(d) COMPLIANCE.— The Secretary shall assure compliance, by an applicant, any other party to the loan, and any railroad or railroad partner for whose benefit assistgince is intended, with the provisions of this title, regulations issued hereunder, and the terms and conditions of the direct loan or loan guarantee, including through regular periodic inspections. "(e) COMMERCIAL VALIDITY.— For purposes of claims by any party other than the Secretary, a loan guarantee or loan guarantee commitment shall be conclusive evidence that the underlying obligation is in compliance with the provisions of this title, and that such obligation has been approved and is legal as to principal, interest, and other terms. Such a guarantee or commitment shall be valid and incontestable in the hands of a holder thereof, including the original lender or any other holder, as of the date when the Secretary granted the application therefor, except as to fraud or material misrepresentation by such holder. "(f) DEFAULT.—The Secretary shall prescribe regulations setting Regulations, forth procedures in the event of default on a loan made or guaranteed under section 502. The Secretary shall ensure that each loan guarantee made under that section contains terms and conditions that provide that— "(1) if a payment of principal or interest under the loan is in default for more than 30 days, the Secretary shall pay

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