§ 5009. Bond Guarantee and Bond Line Terms.
10 CA ADC § 5009Barclays Official California Code of Regulations
10 CCR § 5009
§ 5009. Bond Guarantee and Bond Line Terms.
The terms and conditions of a Bond Guarantee or Bond Line shall be consistent with the resolution of the Corporation approving the Bond Guarantee or Bond Line and shall include all of the following:
(a) Provision that the Corporation promises to pay Losses up to ninety percent (90%) of the Bond, not to exceed five hundred thousand dollars ($500,000), subject only to the restriction that the Surety has not engaged in gross negligence, misrepresentation, fraud, or material breach of the terms of the Guarantee in writing, issuing, or servicing the Bond.
(b) Guarantee shall expire two hundred and ten days (210) following final payment by the party requiring the Bond (Obligee) of all amounts owed to Principal pursuant to the contract bonded, so long as no notice of claims has been received by Surety and is pending as of that expiration date. In the event that a notice of claim is pending as of that expiration date, the Guarantee shall remain in effect until resolution of that claim.
(3) If any suit is filed against Surety upon the Bond, Surety shall immediately inform Corporation of receipt of notice thereof and shall take charge of all suits or claims arising under the Bond and compromise, settle or defend such suit or claim. Surety shall take all steps necessary to mitigate the Loss resulting from Principal's default. Surety shall not join Corporation in any lawsuit to which Surety is a party unless Corporation has denied a Claim.
(4) Liability of the Corporation under the Guarantee shall be reduced if the Guarantee requires Surety to take Collateral, and Surety fails to obtain and perfect the Collateral. In the event that the Surety fails to take or perfect Collateral required by the terms of the Guarantee, the liability of the Corporation pursuant to the Guarantee shall be reduced by the Guarantee percentage of the amount which could reasonably have been recovered by liquidating the Collateral.
(4) The Bond Line shall specify the maximum Guarantee authority, which shall not exceed $500,000. The combined Guarantee liability of all Bonds outstanding for a specific Principal shall not exceed $1,000,000, pursuant to the provisions in subsection 5002(b)(12). A Principal with a Bond Line shall obtain a Guarantee under the Line by sending a copy of the Bond to the Corporation, which shall sign and attach to the Bond a statement that the Bond is guaranteed by the Corporation pursuant to the terms of the Bond Line. This statement shall be signed so long as the Principal and Bond comply with the terms of the Bond Line.
Credits
Note: Authority cited: Section 14024, Corporations Code. Reference: Sections 14002, 14055, 14070, 14071, 14072 and 14071.5, Corporations Code.
History
1. New section filed 2-15-94 as an emergency; operative 2-15-94 (Register 94, No. 7). A Certificate of Compliance must be transmitted to OAL by 6-15-94 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of Government Code section 11346.1(g) (Register 95, No. 7).
3. New section filed 4-17-95 as an emergency; operative 4-17-95 (Register 95, No. 16). A Certificate of Compliance must be transmitted to OAL by 8-15-95 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 4-17-95 order transmitted to OAL 6-12-95 and filed 7-25-95 (Register 95, No. 30).
5. Amendment of subsections (a), (b) and (f)(4) and amendment of Note filed 7-29-2003 as an emergency; operative 7-29-2003 (Register 2003, No. 31). Pursuant to Corporations Code section 14024 a Certificate of Compliance must be transmitted to OAL by 1-26-2004 or emergency language will be repealed by operation of law on the following day.
6. Editorial correction of History 5 (Register 2003, No. 49).
7. Reinstatement of subsections (a), (b) and (f)(4) and reinstatement of Note as they existed prior to 7-29-2003 amendment by operation of Government Code section 11346.1(f) (Register 2004, No. 32).
8. Amendment 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.
9. Editorial correction of History 8 (Register 2005, No. 27).
10. Certificate of Compliance as to 12-27-2004 order, including amendment of subsection (b) and Note, transmitted to OAL 5-25-2005 and filed 7-7-2005 (Register 2005, No. 27).
This database is current through 5/10/24 Register 2024, No. 19.
Cal. Admin. Code tit. 10, § 5009, 10 CA ADC § 5009
End of Document |