2038
PUBLIC LAW 93-618-JAN. 3, 1975
[88
STAT.
(1) no new loan ^ a r a n t e e may be made under this subsection after September 30, 1982, (2) a loan guarantee may be made for the entire amount of the outstanding unpaid balance of such loan, and (3) no more than 20 percent of the amount of loan guarantees made under this subsection by the United States may be made in one State. (e) The Governor of the State, the authorized representative of the community, or the Governor of the State and the authorized representative of the community, in which an applicant for a loan guarantee under subsection (b) is located may enter into an agreement with the Secretary which provides that such State or such community, or that such State and such community, will pay not to exceed one-half of the amount of any liability which arises on a loan guarantee made under subsection (d) if the State in which the applicant for such giiarantee is located has established by law a program approved by the Secretary for the purposes of this section. (f)(1) When considering whether to guarantee a loan to a corporation which is otherwise qualified for the purposes of subsection (d), the Secretary shall give preference to a corporation which agrees with respect to such loan to fulfill the following requirements— (A) 25 percent of the principal amount of the loan is paid by the lender to a qualified trust established under an employee stock ownership plan established and maintained by the recipient corporation, by a parent or subsidiary of such corporation, or by several corporations including the recipient corporation, (B) the employee stock ownership plan meets the requirements of this subsection, and (C) the agreement among the recipient corporation, the lender, and the qualified trust relating to the loan meets the requirements of this section. (2) An employee stock ownership plan does not meet the requirements of this subsection unless the governing instrument of the plan provides that— (A) the amount of the loan paid under paragraph (1)(A) to the qualified trust will be used to purchase qualified employer securities, (B) the qualified trust will repay to the lender the amount of such loan, together with the interest thereon, out of amounts contributed to the trust by the recipient corporation, and (C) from time to time, as the qualified trust repays such amount, the trust will allocate qualified employer securities among the individual accounts of participants and their beneficiaries in accordance with the provisions of paragraph (4). (3) The agreement among the recipient corporation, the lender, and the qualified trust does not meet the requirements of this subsection unless— (A) it is unconditionally enforceable by any party against the others, jointly and severally, (B) it provides that the liability of the qualified trust to repay loan amounts paid to the qualified trust may not, at any time, exceed an amount equal to the amount of contributions required under paragraph (2)(B) which are actually received by such trust, (C) it provides that amounts received by the recipient corporation from the qualified trust for qualified employer securities purchased for the purpose of this subsection will be used exclu-
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