Page:United States Statutes at Large Volume 97.djvu/842

 97 STAT. 810 PUBLIC LAW 98-120—OCT. 12, 1983 Director guaranteed loan, requirements. 19 USC 2341. Employee stock ownership plan. Recipient corporation, lender, and qualified trust. Agreement requirements. "Preference for Firms Having Employee Stock Ownership Plans "(i)(l) When considering whether to grant a direct loan or to guarantee a loan to a corporation which is otherwise certified under section 251, 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 recipi- ent 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 require- ments 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 require- ments of this subsection unless the governing instrument of the plan provides that— "(A) the amount of the loan paid under paragraph (I)(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 corpo- ration from the qualified trust for qualified employer securities purchased for the purpose of this subsection will be used exclu- sively by the recipient corporation for those purposes for which it may usc that portion of the loan paid directly to it by the lender, "(D) it provides that the recipient corporation may not reduce the amount of its equity capital during the one year period beginning on the date on which the qualified trust purchases qualified employer securities for purposes of this subsection, and

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