Section 8.08 - Defaults and Other Material Breaches; Penalties(1) Defaults and breach of Contract. Each Contract will set forth the terms and conditions of the Financial Assistance, and the remedies available to EOED in the event of a default or material breach of the Contract. (a) A default or material breach of a Contract shall occur in the event that the person or entity receiving Financial Assistance;1. fails to make timely repayment of Financial Assistance, taking into account any cure periods provided in the Contract, if applicable;2. makes a material misrepresentation in the Contract or application for Financial Assistance;3. expends any portion of the Financial Assistance for a purpose that is not permitted under the Contract;4. loses its status as an Economic Empowerment Priority Applicant, Social Equity Business or Social Equity Program Participant;5. has its License suspended or revoked, or is subject to any other penalty imposed by the Commission that materially impacts the operation of its business;6. sells, conveys, transfers or pledges any Restricted Asset in violation of section 8.07; or7. fails to comply with recordkeeping, reporting requirements or milestones set forth in the Contract.(b) Any person or entity receiving Financial Assistance that defaults or materially breaches a contract as a result of an event occurring in accordance with 400 CMR 8.08(1)(a)(iv) or (v) shall report such default or material breach to EOED within five (5) business days.(c) Each Contract may define other actions or events that constitute a default or material breach of the Contract.(2) Remedies and Penalties.(a) In the event of a default or material breach of a Contract, or a violation of 400 CMR 8.00, EOED may, in its sole discretion: 1. suspend, condition or terminate the Contract;2. suspend, withhold, rescind or recapture all or a portion of the Financial Assistance awarded under the Contract;3. impose and collect fines or penalties in an amount up to 50 percent of the amount of Financial Assistance disbursed under the Contract per violation;4. notify the Commission of a default or breach of contract;5. foreclose on any lien or exercise rights under any security interest pledged to the Commonwealth as a condition of receiving Financial Assistance; or6. cause a sale or transfer of the License in accordance with section 8.08(3).(b) The rights and remedies set forth herein are not exclusive and do not preclude other remedies available to EOED at law or in equity.(3) Transfer of License upon Default.(a) In the event of an uncured default or material breach of a Contract, EOED may require a sale or transfer of the defaulting entity's License, pursuant to 935 CMR 500.104 or 935 CMR 501.104. Such sale or transfer of the License shall be subject to the rules and regulations of the Commission.(b) In the event a License or ownership interest in a licensed entity, property or assets of the person or entity receiving Financial Assistance is sold or transferred as a result of a default or material breach, such proceeds shall be first applied to the amount outstanding under the Contract, including any fees or penalties assessed by EOED.(4) Any money recovered or fines or penalties paid to EOED pursuant to 400 CMR 8.00 shall be deposited into the Fund.Adopted by Mass Register Issue 1514, eff. 2/2/2024.