(30 ILCS 750/9-5) (from Ch. 127, par. 2709-5)
Sec. 9-5.
Equity Investments.
Any equity investment shall:
(a) Be made only if a participating lender or
other investor also provides a portion of the financing with
respect to the project. The participating lender's or other
investor's financing may be in the form of an equity position,
convertible debt, convertible preferred stock, loan, letter
of credit, guarantee, bond purchase or any other form approved
by the Department;
(b) Finance no more than the lesser of 33 1/3%
of the total amount of any single
project or $250,000 for any single project unless such
limitations are waived by the Director upon a finding that
such waiver is appropriate to accomplish the purposes of this Article;
(c) Be made only if the Department determines,
on the basis of all the information available to it, that the
project would not be undertaken unless the equity investment is provided;
(d) Be protected by adequate security on equity investment
agreements issued by the Department. Equity investment agreements may be
secured by first or second mortgage positions on real or
personal property, by royalty payments, by personal notes or
guarantees, or by any other security satisfactory to the
Department to secure payment of the equity investment;
(e) Be in such principal amount and form, and
contain such terms and provisions with respect to the property
insurance, repairs, alterations, payment of taxes and assessments,
delinquency charges, default remedies, additional
security and other matters as the Department shall determine
adequate to protect the public interest;
(f) Be made to an eligible small business approved
by the Department as responsible and creditworthy;
(g) Be reviewed by the credit review committee
established by the Department pursuant to this Article;
(h) Be made only after the Department has made a
determination that the loan or investment agreement will
cause a project to be undertaken which has the potential to
create substantial employment in relation to the principal
amount of the loan or investment;
(i) Be made for a small business that has certified
the project is a new plant start-up or expansion or a new
venture opportunity and is not an area relocation of an
existing business from another site within Illinois unless
that relocation provides substantial employment growth;
(j) Be made for a small business which agrees: to at all times keep
proper books of record and account in accordance with generally accepted
accounting principles consistently applied, and agree that the Department
is authorized to make or cause to be made, in such manner and at such times
as the Department may reasonably require but subject to Section 9-8 of this
Act, (i) inspection and audits of any books, records and papers in the
custody or control of the small business or others, relating to the small
business's financial or business conditions, including without limitation
the making of copies thereof and extracts therefrom, and (ii) inspection
and appraisals of any of the small business's assets, authorizations to all
federal, State and municipal authorities and officials to furnish reports
of examinations, records and other information relating to the conditions
and affairs of the small business and any information from reports,
returns, files and records of such authorities upon written request to the
small business by the Department;
(k) Be made only to a small business which agrees that if at any time
after the Department has made an equity investment, whatever the reason for
such event and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any court or any order, rule or
regulation of any governmental or non-governmental body the small business
shall (a) commence a voluntary case under the federal bankruptcy laws (as
now or hereafter in effect), (b) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, composition, winding up or adjustment of debts, (c) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy or similar laws,
(d) apply for or consent to, or fail to contest in a timely and appropriate
manner, the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of a substantial part of its
property, (e) admit in writing its inability to pay, or generally not be
paying, its debts as they become due, (f) make a general assignment for the
benefit of creditors; then, and in every such event, in the case of any of
the events specified in clauses (a) through (f) above, without any notice
to the small business or any other act by the Department, the small
business (or an entity acting on its behalf) shall immediately become
obligated to purchase or redeem, and the Department shall immediately
become obligated to sell or surrender for redemption,
all such shares from the Department.
(Source: P.A. 84-1124.)
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