[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR500.211]

[Page 579-580]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
         CHAPTER V--EMERGENCY OIL AND GAS GUARANTEED LOAN BOARD
 
PART 500--EMERGENCY OIL AND GAS GUARANTEED LOAN PROGRAM--Table of Contents
 
                 Subpart C--Oil and Gas Guaranteed Loans
 
Sec. 500.211  Lender responsibilities.

    (a) General. Lender shall comply with all provisions of the 
Guarantee.
    (b) Standard of care. The Lender shall exercise due care and 
diligence in administering the loan as would be exercised by a 
reasonable and prudent banking institution when administering a secured 
loan of such banking institution's own funds without a Federal guaranty. 
Such standard shall also apply to any and all approvals, determinations, 
permissions, acceptances, requirements, or opinion made, given, imposed 
or reached by Lender.
    (c) Representation to the Board. In addition to any other 
representations required by the Guarantee, the Applicant shall represent 
to the Board that it has the ability to, and will, administer the loan, 
as well as to exercise the Applicant's rights and pursue its remedies, 
including conducting any liquidation of the Security or additional 
Security in full compliance with the standard of care, without the need 
for any advice, opinion, determination, recommendation, approval, 
disapproval, assistance (financial or other) or participation by the 
Board, except where the Board's consent is expressly required by the 
Guarantee, or where the Board, in its sole discretion and pursuant to 
the Guarantee, elects to provide same.
    (d) Covenants. With respect to any loan guaranteed by the Board 
pursuant to the Act and this part, the Lender shall require the Loan 
Documents to contain such affirmative and negative covenants by the 
Borrower as are required by the terms and conditions of the Guarantee, 
such as the prohibition on the payment of dividends.
    (e) Monitoring. In accordance with the Guarantee the Lender shall 
monitor Borrower's performance under the Loan Documents to detect any 
noncompliance by the Borrower with any provision thereof.
    (f) Reporting. With respect to any loan guaranteed by the Board 
pursuant to the Act and this part the Lender shall provide the Board 
with the following information, in accordance with the Guarantee:
    (1) Financial statements for the borrower, as provided in the 
Guarantee;
    (2) Projected balance sheet, income statement, and cash flows for 
the Borrower for each year remaining on the term of the loan; and
    (3) A completed signed copy of Form ``Quarterly Compliance 
Statement'' that includes information on the recent performance of the 
loan, within 15 days of the end of each calendar quarter.
    (g) Notices. All written notices, requests, or demands made to the 
Board shall be mailed to the Board at the U.S. Department of Commerce, 
H2500, Washington, DC 20230, except as otherwise specified by the 
Guarantee or as directed by the Board. Lender shall notify the Board in 
writing without delay of:
    (1) Deterioration in the internal risk rating of a loan guaranteed 
under this Program within 5 business days of such action by the Lender;
    (2) The occurrence of each event of default under the Loan Documents 
or Guarantee promptly, but not later than 5 business days, of the 
Lender's learning of such occurrence; and
    (3) Any other notification requirements as provided by law, or by 
the

[[Page 580]]

terms of the Guarantee or Loan Documents.

[64 FR 57947, Oct. 27, 1999, as amended at 65 FR 24107, Apr. 25, 2000; 
65 FR 51522, Aug. 24, 2000]