1. (a) No Guarantee shall be executed by a Corporation until the proposed Guarantee has been reviewed by the Corporation's loan committee and approved by its Board of Directors, unless the Corporation's Board of Directors has delegated the authority to approve a proposed Guarantee to the Corporation's loan committee. No Guarantee shall be approved or executed by a Corporation if the Lender is the same entity as the Corporation issuing the Guarantee.
2. (b) Upon completion of the review and approval by the Corporation's loan committee and/or Board of Directors, the Corporation shall issue a commitment to Guarantee and an executed Guarantee to the Lender.
3. (c) In the event that a Guarantee is issued to a Lender without first complying with the requirements of subsection (a), and the Lender relies upon the Guarantee in making the Loan, the failure by the Corporation to so comply shall not constitute a defense on the part of either the Agency or the Corporation to paying a Demand for payment made pursuant to section 5003.
4. (d) In any case where funds are disbursed to a Lender pursuant to a Demand and the Corporation has failed to comply with subsection (a), the Agency shall immediately exercise all available legal remedies to recover from the Corporation the funds disbursed pursuant to the Demand.

The potential Borrower applying for a Guarantee shall provide a completed Application to the Corporation for review and processing in accordance with the following procedures:

Note: Authority cited: Section 14024, Corporations Code. Reference: Sections 14055, 14060, 14064 and 14071, Corporations Code.

History

1. Order of Repeal filed 6-3-85 by OAL pursuant to Government Code Section 11349.7; effective thirtieth day thereafter (Register 85, No. 26).

2. Repealer and new section filed 6-24-91; operative 7-24-91 (Register 91, No. 42).

3. Amendment of subsections (a)-(c) filed 6-9-97 as an emergency; operative 6-9-97 (Register 97, No. 24). A Certificate of Compliance must be transmitted to OAL by 10-7-97 or emergency language will be repealed by operation of law on the following day.

4. Reinstatement of subsections (a)-(c) as they existed prior to 6-9-97 emergency amendment by operation of Government Code section 11346.1(f) (Register 98, No. 30)

5. Amendment of subsections (a)-(c) and Note filed 7-24-98; operative 7-24-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 30).

6. Amendment of subsections (c)-(d) filed 12-27-2004 as a deemed emergency pursuant to Corporations Code section 14024; operative 12-27-2004 (Register 2004, No. 53). A Certificate of Compliance must be transmitted to OAL by 6-27-2005 or emergency language will be repealed by operation of law on the following day.

7. Editorial correction of History 6 (Register 2005, No. 27).

8. Certificate of Compliance as to 12-27-2004 order, including amendment of Note, transmitted to OAL 5-25-2005 and filed 7-7-2005 (Register 2005, No. 27).