Regulations of Connecticut State Agencies
The following terms have the following meanings as used in these regulations:
"Borrower" means, with respect to a direct loan(s), the employee group or the entity formed by the employee group which is the primary obligor of the direct loan.
"Business" means any occupation, trade or profession engaged in by any individual, partnership, corporation or other entity (1) for profit, (2) for manufacturing, industrial, warehousing or distribution purposes and/or research and development activities or administrative purposes directly related to any of the forgoing purposes.
"Commissioner" means Commissioner of Economic Development or his Deputy.
"Corporate Ownership" means ownership of capital stock possessing (1) more than fifty percent (50%) of the total combined voting power of all classes of capital stock entitled to vote, provided however that in making such calculation there shall be included the voting power of shares of capital stock to be issued upon the exercise of all outstanding options to purchase said capital stock unless said options are subject to a substantial risk of forfeiture; and (2) more than fifty percent (50%) of the aggregate value of all shares of all classes of outstanding capital stock including the value of all shares of capital stock to be issued upon the exercise of all outstanding options to purchase said capital stock.
"Department" means the Connecticut Department of Economic Development.
"Direct Loan" means any Loan(s) made from the assets of the Fund pursuant to Section 32-150 of the Connecticut General Statutes.
"Eligible Loan" means a Loan(s) (1) issued by a bank, savings and loan association, insurance company, mutual fund, investment company, venture capital fund, or other similar institutional lender; (2) to an employee group purchasing a business or to a corporation partnership, ESOT or other entity established to purchase the business; (3) which in the aggregate does not exceed the purchase price as set forth in the purchase agreement for the business less any equity capital contributed by the Employee Group or others; (4) the repayment of which is not guaranteed in whole or in part, directly or indirectly, by either (a) the federal or any state government, political subdivision, agency, department, authority or other instrumentality thereof; or (b) the seller of the business being acquired with the proceeds of such Loan, provided however that Loans failing to satisfy the requirements of clause (1), (3), or (4) (a) hereof for which the Commissioner determines that Interest Rate Subsidies are necessary both to effect the acquisition of the Business and to permit the Employee Group to successfully repay the Loan(s) shall be deemed Eligible Loans.
"Employee" means any person who comes within the definition of "Employee" under Section 3121 (d) of the Internal Revenue Code of 1954, as amended.
"Employee Group" means any group consisting primarily of employees of a Business whether formed through Corporate Ownership, Partnership Ownership or through an ESOP or any entity formed by the Employee Group contemporaneously with the acquisition of the Business to own or lease all or a significant portion of the assets of the Business and/or to operate the Business being acquired.
"ESOP" means an employee stock ownership plan described in Section 4975 (e) (7) of the Internal Revenue Code of 1954, as amended.
"ESOT" means an employee stock ownership trust established under an ESOP.
"Fund" means the Employee Ownership Trust Fund established pursuant to Section 32-151 of the Connecticut General Statutes.
"Interest Rate Subsidies" means amounts paid from the Fund to reimburse an obligor for interest paid on one or more Eligible Loans incurred for the purchase of a Business.
"Loan" or "Loans" means any bona fide debt obligation issued at arms' length for the purchase of a business.
"Partnership Ownership" means ownership of partnership interests possessing in the aggregate more than fifty percent (50%) of the right to share in (1) the capital; and (2) the earnings and profits of the partnership.
"Program of Interest Rate Subsidies" means a series of interest rate subsidies paid over a period not to exceed three (3) years to the Employee Group to whom they were granted.
(Effective April 27, 1987)