Interest rate subsidy and direct loans (Repealed)

(a) An interest rate subsidy: (1) may be granted on all or a portion of any Eligible Loan(s). (2) shall not reduce the interest rate on any Eligible Loan by more than five percent (5%). (3) shall not exceed in total the lesser of fifteen percent (15%) of the total principal amount of any Eligible Loan(s) or $1,000,000. (4) shall not exceed three (3) years in term. (5) shall be solely for the benefit of the Employee Group to whom they are granted and shall not be assignable. (6) shall be payable annually, upon certification in form and substance acceptable to the Commissioner. (b) Direct loan(s): (1) The Direct Loans(s) may be secured or unsecured as the Commissioner determines to be appropriate in the particular circumstances. If a Direct Loan(s) is to be secured, the Commissioner may require the borrower to provide as security any or all of the following: real property, accounts, chattel paper, documents, instruments, general intangibles, goods, equipment, inventory or other personal property, and may further require the borrower to have executed and delivered such security agreements, financing statements, mortgages, pledges, assignments, subordinations, guarantees or other documents or evidences of security as and in the form required by the Commissioner. (2) Direct Loan(s) shall not exceed in amount the lesser of: (A) $500,000, or (B) 10% of the purchase price as set forth in the purchase agreement for the business being acquired. (3) The term of a direct loan shall not exceed twenty five years from the date of the first disbursement and shall be repaid on an amortized schedule of payments or upon such other method of payment of principal and interest as the Commissioner considers necessary and appropriate in the particular circumstances. (4) At no time shall the aggregate principal balance of all outstanding direct loans issued under this Section 32-150-4 (b) exceed $4,000,000. (c) Direct loan note: (1) Each Direct Loan shall be evidenced by a promissory note which shall contain a provision permitting the borrower to prepay the loan in whole or in part upon any interest payment date. (2) The promissory note shall provide for the payment of interest at a rate not to exceed 1% above the interest paid by the State of Connecticut on the latest general obligation bonds issued prior to the date of approval of the Direct Loan. (3) The promissory note may provide for the collection of a late charge, not to exceed two percent of any installment more than fifteen days in arrears. Late charges shall be separately charged to and collected from the borrower. (4) Any misrepresentation, breach of warranty or other breach of any agreement or covenant contained in the agreement, the promissory note, or other documents signed by the borrower in connection with such loan shall be considered a default under such promissory note. (5) The promissory note shall contain a provision that the failure of the borrower to make a payment of any installment of principal or interest due under the promissory note within thirty days from the due date shall constitute a default. (6) The promissory note shall provide that upon default, any and all sums owing by the borrower under the promissory note shall, at the sole discretion of the Commissioner, become immediately due and payable. (7) The promissory note shall provide that upon default interest on the promissory note shall automatically increase two percent per annum above the rate of the said note and shall apply not only after default, but after any judgment rendered upon said promissory note. (8) The promissory note shall provide for payment of reasonable attorneys' fees and legal costs in the event the borrower shall default in the payment of the note. (9) The promissory note shall contain such other clauses and covenants as the Commissioner in his discretion, may require. (d) Disbursement and use of proceeds: Disbursement of direct loan proceeds and interest rate subsidies shall be made at the discretion of the Commissioner in accordance with the agreement(s).