Md. Code Regs. 24.05.07.10

Current through Register Vol. 51, No. 22, November 1, 2024

Section 24.05.07.10 - Equity Guaranty Application and Processing Procedures

A. Application. Equity guaranty applications shall be made upon standard forms prescribed by the Authority. Each application shall be properly and fully completed and properly executed by the applicant.

B. Processing of Application. To make a determination of the eligibility of the applicant and the investor in accordance with Regulation .04 of this chapter, the Authority's staff shall perform an initial review of each equity guaranty application and may also perform a preliminary audit investigation of the applicant's and the investor's books and records.

C. Final Processing. Before approval of the equity guaranty, the applicant shall provide, for the Authority's review and approval, a copy of a commitment letter from the investor to provide equity financing which, at a minimum, shall state the amount, rate, and terms of the financing.

D. Equity Guaranty Approval. Approval of an equity guaranty shall be evidenced by a resolution of the Authority.

E. Equity Guaranty Documents. The equity guaranty documents may include, among others:

(1) A guaranty agreement;

(2) Personal and corporate guarantees;

(3) Evidence of proper equity investment approvals and filings by the applicant;

(4) Assignments of life insurance;

(5) Assignments of contracts and notices of assignment;

(6) Evidence of equity investment, such as stock certificates; and

(7) Other documents the Authority may require.

F. Fees. As a precondition to the effectiveness of the equity guaranty, the Authority shall receive in advance a guaranty fee of 1 percent of the outstanding equity investment amount from the applicant.

Md. Code Regs. 24.05.07.10