ยง 1836-e. Loan agreements. 1. If the authority approves an application
for a loan under this subtitle, the local development corporation may
enter into a loan agreement with the employee ownership association
whereby the local development corporation agrees to loan to the employee
ownership association the remaining funds necessary for the eligible
project.
2. No such loan may exceed forty percent of the cost of the project
and the repayment of such loan shall be secured by a mortgage thereon
which shall not be a junior encumbrance thereon by more than fifty
percent of such cost, and by means of the guarantees of the loans made
by banking organizations which guaranty shall not exceed eighty percent
of the cost of the project, except as provided in paragraphs (a) and (b)
of subdivision two of section eighteen hundred three and paragraph (a)
of subdivision seven of section eighteen hundred twenty-three of this
chapter.
3. The local development corporation may not enter into any loan
agreement unless the authority determines through an appropriate method
that there is reasonable assurance of repayment. The authority shall
establish such requirements or terms as it may deem necessary or
desirable to secure the repayment of the loan and to protect the
interests of the authority and the holders of its bonds.
4. Subject to the requirements of this subtitle, the authority is
authorized to determine the form and substance of any loan agreement
made pursuant to this subtitle.