1. A. During the period when LEDC owns an investment in a BIDCO, the BIDCO shall operate in accordance with the following parameters.

   1. 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. 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. 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:

      1. 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;
      2. 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. 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. 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. 6. Reporting requirements shall include the following:

      1. a. annual audited financial statements in accordance with GAAP, quarterly financial statements, and minutes of all regular and special board meetings;
      2. 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;
      3. 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;
      4. d. the BIDCO shall provide LEDC with complete copies of OFI's annual audit report;
      5. e. if the BIDCO is also a CAPCO, it must be in compliance with all CAPCO regulations;
      6. 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. 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.

Authority Note

AUTHORITY NOTE: Promulgated in accordance with R.S. 51:2312 (A) (7), (B) (1) and (B)(3).

Historical Note

HISTORICAL NOTE: Promulgated by the Department of Economic Development, Economic Development Corporation, LR 18:1357 (December 1992), amended LR 23:555 (May 1997), LR 26:2246 (October 2000).