[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR307.18]

[Page 630-631]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
CHAPTER III--ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE
 
PART 307_ECONOMIC ADJUSTMENT ASSISTANCE INVESTMENTS--Table of Contents
 
Subpart B_Special Requirements for Revolving Loan Funds and Use of Grant 
                                  Funds
 
Sec.  307.18  Addition of lending areas; merger of RLFs.

    (a)(1) Addition of Lending Areas. An RLF Recipient shall make loans 
to implement and assist economic activity only within its EDA-approved 
lending

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area, as set forth and defined in the RLF Grant and the Plan. An RLF 
Recipient may add an additional lending area (an ``Additional Lending 
Area'') to its existing lending area to create a new merged lending area 
(the ``New Lending Area'') only with EDA's prior written approval and 
subject to the following provisions and conditions:
    (i) EDA shall have disbursed the full amount of its Investment 
Assistance to the RLF Recipient;
    (ii) The Additional Lending Area must fulfill the economic distress 
criteria for Economic Adjustment Investments under this part and in 
accordance with Sec.  301.3(a) of this chapter;
    (iii) Prior to EDA's disbursement of additional funds to the RLF 
Recipient (for example, through a recapitalization), EDA shall determine 
a new Investment Rate for the New Lending Area based on the criteria set 
forth in Sec.  301.4 of this chapter;
    (iv) The RLF Recipient must demonstrate that the Additional Lending 
Area is consistent with its CEDS, or modify its CEDS for any such 
Additional Lending Area, in accordance with Sec.  307.9(b)(1);
    (v) The RLF Recipient shall modify its Plan to incorporate the 
Additional Lending Area and revise its lending strategy, as necessary;
    (vi) The RLF Recipient shall execute an amended RLF Grant award 
agreement, as necessary; and
    (vii) The RLF Recipient fulfills any other conditions reasonably 
requested by EDA.
    (2) The New Lending Area designation shall remain in place 
indefinitely following EDA approval.
    (b) Merger of RLFs--(1) Single RLF Recipient. An RLF Recipient with 
more than one (1) EDA-funded RLF Grant may consolidate two (2) or more 
EDA-funded RLFs into one (1) surviving RLF with EDA's prior written 
approval and provided:
    (i) It meets the requirements to obtain annual report status 
identified in paragraphs (a)(2) through (a)(4) of Sec.  307.14;
    (ii) It demonstrates a rational basis for undertaking the merger 
(for example, the lending area(s) and borrower criteria identified in 
different RLF Plans are compatible, or will be compatible, for all RLFs 
to be consolidated);
    (iii) It amends and consolidates its Plan to account for the merger 
of RLFs, including items such as the New Lending Area (including any 
Additional Lending Area(s)), its lending strategy and borrower criteria;
    (iv) Prior to EDA's disbursement of additional funds to the RLF 
Recipient (for example, through a recapitalization), EDA shall determine 
a new Investment Rate for the New Lending Area based on the criteria set 
forth in Sec.  301.4 of this chapter; and
    (v) The RLF Recipient fulfills any other conditions reasonably 
requested by EDA.
    (2) Multiple RLF Recipients. Two (2) or more RLF Recipients may 
consolidate their EDA-funded RLFs into one (1) surviving RLF with EDA's 
prior written approval and provided:
    (i) The surviving RLF Recipient meets the requirements to obtain 
annual report status identified in paragraphs (a)(2) through (a)(4) of 
Sec.  307.14;
    (ii) The surviving RLF Recipient amends and consolidates its Plan to 
account for the merger of RLFs, including items such as the New Lending 
Area (including any Additional Lending Area(s)), its lending strategy 
and borrower criteria;
    (iii) Prior to EDA's disbursement of additional funds to the 
surviving RLF Recipient (for example, through a recapitalization), EDA 
shall determine a new Investment Rate for the New Lending Area based on 
the criteria set forth in Sec.  301.4 of this chapter;
    (iv) EDA must provide written approval of the merger agreement(s), 
modifications and revisions to the Plans and any other related 
amendments thereto;
    (v) All applicable RLF Grant assets of the discharging RLF 
Recipient(s) transfer to the surviving RLF Recipient as of the merger's 
effective date; and
    (vi) The surviving RLF Recipient becomes fully responsible for 
administration of the RLF Grant assets transferred and fulfills all 
surviving RLF Grant requirements and any other conditions reasonably 
requested by EDA.

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