Rule 122:15-1-03 | Ineligibility of principal and surety; loss of program eligibility.
(A) A principal is ineligible for a development services agency bond guarantee under one or more of the following circumstances;
(1) An owner, officer, director, or general partner of the principal is under indictment for, or has been convicted of a felony involving protecting the integrity of business transactions or business relationships; or a final civil judgment has been entered stating that such owner, officer, director, or general partner has committed a breach of trust or has violated a law or regulation protecting the integrity of business transactions or business relationships; or
(2) A regulatory authority has revoked, canceled, or suspended a license of the principal, or an owner, officer, director, or general partner of the principal, which is necessary to perform the contract; or
(3) The principal has obtained a bond guaranteed by fraud or material misrepresentation.
(B) A surety is ineligible for a development services agency bond guarantee under one or more of the following circumstances:
(1) A regulatory authority has revoked, canceled, or suspended a license of the surety, or an owner, officer, director, or general partner of the surety, which is necessary to transact business as a surety insurer; or
(2) The surety has obtained a bond guarantee by fraud or material misrepresentation; or
(3) The surety has materially breached the EDGE bond guarantee participation agreement with the development services agency.
(C) A principal may lose eligibility for further development services agency bond guarantees if any of the following occurs under a development services agency-guaranteed bond issued on behalf of the principal:
(1) Legal action under the guaranteed bond has been initiated;
(2) The obligee has declared the principal to be in default under the contract;
(3) The surety has requested reimbursement for losses incurred under the bond; or
(4) The principal committed fraud or material misrepresentation in obtaining the guaranteed bond.
(D) A surety may lose eligibility for further development services agency bond guarantees if any of the following occurs under a development services agency-guaranteed bond issued on behalf of the principal:
(1) The surety committed fraud or material misrepresentation in obtaining the guaranteed bond.
(2) The surety has materially breached the EDGE bond guarantee participation agreement.
Supplemental Information