PARRIS N. GLENDENING, Governor                             H.B. 85

[(3) The total amount of equity participation financing disbursed may not
exceed $3,000,000 for a calendar year.]

[(4)](3) (i) The Authority shall find that there is a reasonable
probability that the Authority will recover its initial investment and an adequate return on
investment.

(ii) The Authority's investment shall be recoverable within:

1.       7 years of the equity participation financing in a franchise;

2.       7 years of the equity participation financing in an enterprise
acquiring an existing business; or

3.       10 years of the equity participation financing in a
technology-based business.

[(5)] (4) The Authority's recovery shall be the greater of the current value
of the percentage of the equity investment in the enterprise or the amount of the initial
investment in the enterprise.

[(6)] (5) The value of the business entity at the time of recovery shall be
determined after obtaining at least 1 independent appraisal of the value from an
appraiser selected from a list of at least 3 appraisers supplied by the authority.

(c)     The liability of the State and of the Authority in providing equity participation
financing is limited to its investments under the Program.

(d)    When applying to the Authority to acquire an existing business, an enterprise
[shall have the following minimum qualifications:

(1)     The enterprise or its principals shall have a:

(I) A minimum net worth of at least $75,000 pledged as security; and

(II) AT LEAST $75,000 IN EQUITY INVESTMENT; OR

(III) A COMBINATION OF A MINIMUM NET WORTH PLEDGED AS
SECURITY AND AN EQUITY INVESTMENT, TOTALING AT LEAST $75,000; AND

(2)     The enterprise] or its principals shall have had 3 or more years of
successful experience with demonstrated achievements and management responsibilities.

(e)     When being acquired, the existing business shall meet the following minimum
qualifications:

(1)     The existing business shall have been in existence for at least 5 years;

(2)     The existing business shall have been profitable for at least 2 of the
previous 3 years;

(3)     The existing business shall have sufficient cash flow to service the debt
and ensure adequate return of the Authority's investment;

(4)     The existing business shall have the capacity for growth and job creation;

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