(1) Where an issuer has or will have loans or other material transactions with affiliates, the Office of Financial Regulation shall require that the issuer have and maintain at least two (2) independent directors on its board.
    (2) In additions to loans, other material transactions include:
    (a) Leasing, renting or purchasing property or equipment from affiliates;
    (b) Consulting contracts;
    (c) Business dealings for the purchase of inventory, services or distribution systems;
    (d) Royalty or licensing arrangements;
    (e) Guaranties of corporate debt by affiliates;
    (f) Other business relationships where the terms of such transactions are no less favorable to the promoters than to those generally available from unaffiliated third parties.
    (3) If material loans or transactions have been made or will be made, the Office of Financial Regulation shall require disclosure as follows:
    (a) All future loans or transactions will be made or entered into on terms that are no less favorable to the issuer than those that can be obtained from unaffiliated third parties; and,
    (b) Any forgiveness of loans must be approved by a majority of the independent directors who do not have an interest in the transactions and who have access, at the issuer’s expense, to issuer’s or independent counsel.
    (4) For past transactions which are now closed, if there were less than two (2) such disinterested independent directors at the time of the transaction, the prospectus shall disclose that the issuer lacked sufficient disinterested independent directors to ratify the transaction.
    (5) Loans not to be subject to this rule include loans to affiliates for ordinary company operating expenses and loans for relocation costs of officers, directors and employees, and loans made by issuers whose primary business is that of making loans, provided such loans were made in accordance with policies used by other commercial lenders for similar loans made in the lender’s locale.
Rulemaking Authority Florida Statutes § 517.03(1). Law Implemented 517.081(3), (7) FS. History—New 11-30-97, Formerly 3E-700.027.