The Lender shall have the option of
retaining all of the Loan. If the Lender desires to assign or participate all
or a portion of the guaranteed portion of the Loan at or subsequent to Loan
closing, the Loan must not be in Default. The Lender is not permitted to assign
or participate any amount of the guaranteed or unguaranteed portions of the
Loan to any of the following:
Borrower, or member of the immediate family of the Borrower, their officers,
directors, stockholders, other owners or any parent, subsidiary or
(2) a Corporation or any
employee or a member of the Board of Directors of a Corporation or
(3) any employee of the Agency.
(b) The Lender may assign all or
part of the guaranteed portion of the Loan to one or more Holders, except that
the Lender is required to retain a minimum of ten percent (10%) of the Loan
amount, and the Lender shall retain the responsibility for servicing the
(c) The Lender shall notify
the Corporation of the assignment no later than forty-five (45) days following
the assignment. No later than fifteen (15) days following the notification
provided by the Lender, the Corporation shall register the assignment by
completing and submitting the Assignment Registration Form (Form CTCA-047, new,
1998) to the Agency. No later than thirty (30) days following the submission of
the Assignment Registration Form, the Agency shall notify the Lender and Holder
of the registration.
Assignment Registration Form shall consist of the items listed below:
(1) The date of assignment or
(2) The Loan
(3) A description of the
Loan including: whether the Loan is a credit agreement or a promissory note,
the date the Loan was executed, and the name of the Borrower.
(4) The outstanding balance of the
(5) The percent of Guarantee
assigned to the Holder.
certification that the Loan is not in Default and not a pending
(7) A certification that
Holder complies with the requirements described in subsections (a)(1) through
(8) The Holder's contact
person, mailing address, telephone number, and if available facsimile number
and e-mail address.
Lender's contact person, mailing address, telephone number, and if available
facsimile number and e-mail address.
(10) The titles and dated signatures of the
Lender, the Holder, and the Corporation.
(e) When a guaranteed portion of a Loan is
sold by the Lender to a Holder, the Holder shall succeed to all rights of
Lender under the Guarantee in proportion to the amount of the Loan purchased.
The Lender shall remain bound to all the obligations under the
(f) The Lender shall be
responsible for servicing the entire Loan, and shall remain the secured party
of record. The entire Loan shall be secured by the same security with equal
lien priority for the guaranteed and unguaranteed portions of the
(g) The Guarantee and right
to issue a Demand will be directly enforceable by Holder notwithstanding any
fraud or misrepresentation by Lender or any unenforceability of the Guarantee
by Lender, unless Holder has actual knowledge of said fraud, misrepresentation
or unenforceability of the Guarantee prior to purchase. Notwithstanding the
provisions of section 5003(a), the Holder shall be authorized to make Demand
upon the Lender, with a copy sent to the Corporation, when any payment owed
pursuant to the Loan is sixty (60) days in arrears, and the Holder shall be
under no obligation to delay Demand pending liquidation of Collateral if the
Loan is a Collection Guarantee. If Holder has not received a response with
thirty (30) days agreeing to purchase the guaranteed portion of the Loan, the
Holder shall be authorized to send a Demand to the Corporation. It shall be the
responsibility of the Corporation to verify the Demand figures provided by the
Holder with the Lender. In any dispute the Lender Demand figures shall be used.
The Holder shall be entitled to receive interest on the unpaid portion of the
guaranteed portion of the Loan until the Demand payoff is mailed to the
(h) Nothing contained
herein shall constitute any waiver by the Agency or the Corporation of any
rights they possess against the Lender, and the Lender agrees that it will be
liable and will promptly reimburse the trust fund for any payment made by the
Agency to Holder which, if such Lender had held the Guaranteed portion of the
Loan, the Agency would not be required to make.