Compilation of Rules and Regulations of the State of Georgia › Department 110 - RULES OF GEORGIA DEPARTMENT OF COMMUNITY AFFAIRS › Chapter 110-25 - THE LIFE SCIENCES FACILITIES FUND LOAN PROGRAM DESCRIPTION › Subject 110-25-1 - THE LIFE SCIENCES FACILITIES FUND LOAN PROGRAM DESCRIPTION › Rule 110-25-1-.07 - Loan Terms

Current through Rules and Regulations filed through June 27, 2024
(1) Terms for the Loans, including interest
				rate, amortization, loan fees, collateral and other consideration, will be
				determined during the underwriting process based upon the nature of the assets
				financed, the needs of the sub-recipient business and the risk associated with
				the project. In general, funds will either be loaned directly to the
				subrecipient business or transferred to recipient local governments or
				authorities with conditions that determine the terms and covenants required in
				the loan to the sub-recipient business, including eligible uses, collateral
				requirements, and private-investment and job-creation commitments.
(2) Generally, loans will be secured, at a
				minimum, by the assets to be financed, (e.g., via a UCC security interest, a
				leasehold deed to secure debt) and with other security (e.g. corporate
				guarantees) on an as-needed basis. The interest rates on the loans will
				generally be below market-rate financing as an incentive to move the project
				forward and to improve the company's cash flow; interest payments may be
				deferred until the end of the loan term.
(3) If funds are passed through a local
				government authority, then that entity shall reimburse the total amount of the
				loan funds to the Department; provided, however, that the reimbursement
				obligation shall generally be limited to payments made by the Company under the
				loan. Reimbursement by the recipient shall be made in periodic payments in
				amounts equivalent to payments made by the Company under the loan, less any
				fees that might be agreed upon in writing between the recipient and the
				Department.
(4) All loan
				repayments, including interest, fees and principal repayments, shall be
				recaptured by DCA in the LSFF program fund to be reloaned to future eligible
				borrowers and to cover administrative costs of the program.
(5) Generally, the terms of the loan shall
				contain at least one "triggering event" that will require the acceleration of
				the term of the loan. For example, a loan with a term of ten years may be
				accelerated to a three-year term in the event that the sub-recipient Company is
				acquired, has an initial public offering, or receives regulatory approval from
				a governing agency (e.g., the FDA or USDA).
(6) In most cases, loans will contain terms
				requiring immediate and full repayment of the Loan balance if the company moves
				its operations out of Georgia, closes the LSFF-funded facility, is sold or
				liquidated. The Department also reserves the right to establish criteria for
				the recapture of loan funds upon transfer of project assets to an entity other
				than the sub-recipient business or upon any event that violates state law, the
				public purpose of the loan program, any of the loan conditions, or any
				intergovernmental contract provision. All recaptured funds must be returned to
				the Department unless otherwise specified by the Department.
O.C.G.A. Secs.
				  50-8-8,
				  50-26-5,
				  50-26-8,
				  50-26-18.