Compilation of Rules and Regulations of the State of Georgia
Department 413 - GRANTS OF THE ONEGEORGIA AUTHORITY
Chapter 413-5
Subject 413-5-1 - STRATEGIC INDUSTRIES LOAN FUND
Rule 413-5-1-.07 - Loan Terms

(1) Terms for the Loans 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 be granted 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) Loans will be secured, at a minimum, by the assets to be financed and with other security as needed on a case-by-case basis.

(3) The recipient local government or authority shall reimburse the total amount of the loan funds to OneGeorgia; provided, however, that the recipient's reimbursement obligation shall be limited to payments made by the Company under the loan. Reimbursement by the recipient shall be made in quarterly 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 One Georgia. The recipient may satisfy this condition by requiring the Company to repay the loan amount to OneGeorgia for the account of the recipient.

(4) 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).

(5) As consideration for the Loan, sub-recipient companies may be required to issue an equity interest to the State in the form of warrants, stock or stock options.

(6) Immediate and full repayment of the Loan will be required if the company moves its operations out of Georgia within five years of the award date. The Authority 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, or any of the loan conditions. All recaptured funds must be returned to the Authority, unless otherwise specified by the Authority.