Sec. 32-150-3. Application and agreement

(a) Application for an interest rate subsidy and/or a direct loan shall be submitted on forms prescribed by the Commissioner. No application shall be considered unless the information required by such forms is furnished and, in the case of an application for a direct loan, an application fee is paid in such amount as the Commissioner may from time to time determine to be reasonable and necessary.

(b) Upon approval of an application by the Commissioner, the Department and the Employee Group shall enter into an agreement which shall set forth the terms and conditions set forth by these regulations and other terms and conditions considered by the Commissioner to be necessary.

(c) The agreement shall be executed on forms provided by the Commissioner and shall be effective only upon approval by the Commissioner and the Employee Group and, in the case of a direct loan(s), payment by the Employee Group of a commitment fee considered by the Commissioner to be reasonable and necessary.

(d) The agreement with respect to interest subsidies shall provide, without limitation:

(1) the percentage of the interest rate subsidy,

(2) the number of years for which the subsidy is committed,

(3) the maximum amount of the interest rate subsidy,

(4) the condition(s) for termination of the Interest Rate Subsidy.

(e) The agreement with respect to a Direct Loan(s) shall provide, without limitation:

(1) that the proceeds will be used solely for purposes related to the initial purchase of the business;

(2) that the Borrower shall provide the Department with such financial and other reports as the Commissioner, in his discretion, may require from time to time;

(3) that the Borrower shall notify the Department promptly of any material adverse change in the financial condition or business prospects of the Borrower or its business;

(4) that the Borrower shall represent and warrant that it has the power and authority to enter into the direct loan agreement and to incur the obligations therein provided for, and that all documents and agreements executed and delivered in connection with the direct loan will be valid and binding upon the Borrower in accordance with their respective terms;

(5) for such collateral security for the direct loan(s) as the Commissioner may require pursuant to Section 32-150-4 (b) (1) of these regulations and to execute and deliver all documents in connection therewith;

(6) the conditions for termination of, and default under, the direct loan;

(7) that all costs of closing will be paid by the borrower; and

(8) for such other representations and warranties as may be determined by the Commissioner to be necessary.

(f) If, upon examination of the application, supporting information and results of any investigation, the Commissioner rejects such application, then the request may not be granted and the Department shall cause the applicant to be notified that the application has been denied.

(Effective April 27, 1987)