Sec. 23.4. Terms of local buy-out loans

(a) A project loan shall not exceed $1 million.

(b) A project loan shall not exceed up to 10 percent of the cost of the local buy out or the amount of the purchaser's equity contribution, whichever amount is less.

(c) Loans shall be made only to fill a financing gap between the equity contribution of the purchaser, secured debt financing provided by other sources, any financial participation by the seller, and the selling price of the company.

(d) Such loans shall be secured, but the security interest may be subordinate to the security interest on any other private or public financial assistance provided to the purchaser.

(e) The term of the loan shall be of the shortest duration consistent with the needs of the business, but not exceeding 20 years.

(f) The interest rate of a loan shall be determined by the UDC, and the UDC may accept warrants in addition to any interest charges.

(g) Standard repayment terms will include level debt service payments over the term of the project loan. In certain circumstances deferred or graduated payments may be permitted, provided that the project loan be fully amortized over the remainder of the loan term.