Recourse against parties

(a) Form. Recourse against Borrowers or guarantors may be by a guarantee, irrevocable letter of credit, additional tangible or intangible collateral, or another form acceptable to MARAD.

(b) Principal accountability. The principal parties in interest, who ultimately stand most to benefit from a Project, will be held financially accountable for a Project's performance. MARAD may require recourse against:

(1) All major shareholders of a closely held corporate Borrower;

(2) The parent corporation of a subsidiary corporate Borrower;

(3) The related business entities of the Borrower if MARAD determines that the Borrower lacks substantial pledged assets other than the Project property or is otherwise lacking in any credit factor required to approve the Application;

(4) Any or all major limited partners; and

(5) Against any others interest it believes is necessary to protect.

(c) Recourse against parties. Should MARAD determine that a secondary means of repayment from other sources is necessary (including the net worth of parties other than the Borrower), MARAD may require secured or unsecured recourse against any such secondary repayment sources.

(d) Recourse unavailable. Where appropriate recourse is unavailable, the conservatively projected net liquidating value of the Borrower's assets (as such assets are pledged to MARAD) must, in MARAD's sole judgment, substantially exceed all projected exposure or other risks of loss to MARAD.