Louisiana Administrative Code › Title 19 - CORPORATION AND BUSINESS › Part VII - Louisiana Economic Development Corporation › Subpart 6 - Louisiana Economic Development Corporation › Chapter 71 - BIDCO Investment and Co-Investment Program › Section VII-7111 - Operating Requirements

Current through Register Vol. 50, No. 6, June 20, 2024
A.
				  During the period when LEDC owns an investment in a BIDCO, the BIDCO shall
				  operate in accordance with the following parameters.
1. The BIDCO shall provide financing
				  assistance to Qualified Louisiana Businesses or to firms who will become
				  Qualified Louisiana Businesses as a result of the funding by the BIDCO. If the
				  business firm has multi-state operations, the criterion that shall be used by
				  the BIDCO is whether or not Louisiana is the state where the primary economic
				  benefit of the financing transaction is likely to occur. The BIDCO shall
				  refrain from purchasing corporate stocks or other capital positions unless such
				  investments are part of the BIDCO's funding plan for the Qualified Louisiana
				  Business entity.
2. The BIDCO shall
				  maintain as its primary focus the markets which it identifies in its initial
				  business plan. The BIDCO shall not engage in operations outside the state of
				  Louisiana while LEDC is an investor.
3. The BIDCO shall invest in or lend to
				  qualified Louisiana businesses an amount at least equal to the sum of LEDC's
				  funds plus the matching private-capital funds. For examples:
a. if LEDC invests $2.5 million to match $5
				  million of private capital funds, the BIDCO shall invest in or lend to
				  Qualified Louisiana Businesses a minimum of $7.5 million of its total portfolio
				  exclusive of operating expenses and minimum capital reserve requirements as set
				  out by the Office of Financial Institutions;
b. if LEDC invests $1 million to $2 million
				  of private capital, the BIDCO shall invest/lend to Qualified Louisiana
				  Businesses a minimum of $3 million of its total portfolio exclusive of
				  operating expenses and minimum capital reserve requirements as set out by the
				  Office of Financial Institutions.
4. Without the consent of LEDC, the BIDCO
				  shall not apply to OFI to surrender its license, provided, however, that if
				  LEDC is not a stockholder no consent of LEDC is necessary. If LEDC grants its
				  consent for such license-surrender application, the application shall state the
				  commitment of the BIDCO to repurchase LEDC's stock at the time of license
				  surrender for its then-current book value or market value, whichever is
				  greater, or, if discounted pursuant to these rules, for the agreed-upon
				  discounted price. If OFI requires surrender of license, the BIDCO must
				  immediately notify LEDC to review the future plans of operation.
5. LEDC may negotiate additional operating
				  requirements or material changes in the business plan with individual applicant
				  BIDCOs on a case by case basis, as needed to safeguard the quality of LEDC's
				  investment or to promote achievement of the objectives of the program or
				  LEDC.
6. Reporting requirements
				  shall include the following:
a. annual audited
				  financial statements in accordance with GAAP, quarterly financial statements,
				  and minutes of all regular and special board meetings;
b. timely advice of all management and board
				  member changes with reasons for the changes and submission of new members'
				  resumes showing experience and qualifications;
c. reports of activity including client
				  businesses' names, addresses, employment levels before and after funding, and
				  other information required for LEDC's annual legislative report;
d. the BIDCO shall provide LEDC with complete
				  copies of OFI's annual audit report;
e. if the BIDCO is also a CAPCO, it must be
				  in compliance with all CAPCO regulations;
f. the BIDCO's officers shall provide LEDC
				  annual certification that BIDCO investments are consistent with their business
				  plan and that they are in compliance with the Code of Governmental Ethics,
				  R.S.
				  42:1112 et seq.
7. The failure of a BIDCO to comply with
				  these operating requirements will constitute violation of the premise(s) on
				  which LEDC relied in making its investment and will be just cause for LEDC to
				  demand and require that its investment be immediately repurchased in whole or
				  in part.