Business Credit Agreement Rider

Transcription

1 Chapter 4: Business Credit Agreement Rider The Business Credit Agreement Rider is used as an optional document to add, change or delete terms and conditions from the Business Credit and Continuing Security Agreement (BCCSA). It contains a title, a brief explanation of purpose and a blank text field to capture additions, deletions, or adjustments to the BCCSA. Note: State specific notices contained in this chapter should be inserted on the Business Credit Agreement Rider. Document Description When used: Purpose: Document number: How distributed: Imprinting: Number of pages It is used any time the BCCSA needs to be amended by documenting special terms and conditions, changes, modifications, adjustments, or to document any other type of adjustment to the BCCSA. This document is used in conjunction with and is completed prior to the closing of the loan. The Business Credit Agreement Rider can contain language or adjustments that the borrower s attorney may want included in the loan as long as the credit union agrees. The credit union may use this document or can create its own similar document to perform the same function. It provides the flexibility needed by the credit union to customize business loans without changing the language of the BCCSA or to accommodate specific terms unique to the borrower. BXB20* The credit union completes the document and attaches it to the BCCSA. This document allows an imprint of your credit union s name, address, phone number and logo. If the imprinting option is not selected, be sure to add your credit union name while processing the document. One State specific versions: None However state specific language is included in this chapter of the User Guide to be inserted in the Business Credit Agreement Rider when applicable. (See note above) *Indicates spaceholder for version number CUNA Mutual Group 29

2 Chapter 4 Page one sample Use the numbers provided to locate the corresponding instructions on the next page. 1. Read rider instructions 2. Insert agreement specific language 3. Insert state specific language 30 LOANLINER Small Business Lending User Guide

3 Business Credit Agreement Rider Page one instruction Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 1. Read rider instructions. This section provides an explanation for the Business Credit Agreement Rider and incorporates it into the BCCSA.. The borrower should be encouraged to read this document carefully. 2. Insert agreement specific language. This blank section can be used to include any specific credit union language that is needed to satisfy any credit union policy and procedure, terms of the BCCSA or information specific to the borrower. 3. Insert state specific language. It is only necessary to include notices applicable to your state. The state language to use depends on where the borrower is domiciled. In other words the domicile of the borrower dictates the applicable state notice to be inserted. Alaska. If the domicile of the borrower is Alaska then insert this language: Community Property: Borrower has or has not entered into a community property agreement or community property trust. If Borrower has not entered into a community property agreement or trust, Borrower agrees not to enter into such an agreement or trust without Credit Union's prior written consent. STATUTE OF LIMITATIONS. The limitations period for enforcing any right under this Agreement and each related document shall be ten (10) years from the date of discovery by us of any breach or act of default by you or any Guarantor. Jurisdiction of Organization: Organization Identification Number: Connecticut. If the domicile of the borrower is Connecticut then insert this language: Acknowledgement of Commercial Transaction. You acknowledge and agree that the transactions of which the business credit and continuing credit agreement are a part of commercial transactions as that term is defined in section a of the Connecticut General Statutes, as amended. By executing the Business Credit and Continuing Credit Agreement, you are voluntarily and knowingly waiving and relinquishing any and all rights which you may have pursuant to any law or constitutional provision, including without limitation, chapter 903(a) of the Connecticut General Statutes, as amended, including your right to any notice or hearing or the posting of a bond prior to any attempt by the credit union to obtain a prejudgment remedy against you in connection with transactions pursuant to the Business Credit and Continuing Security Agreement. Georgia. If the domicile of the borrower is Georgia, insert this language: INTEREST ON ATTORNEY S FEES IN THE STATE OF GEORGIA. For Loans made in the state of Georgia, the borrower agrees to pay 15% of the principal and interest owning hereunder as attorney s fees if the debt is collected by or through an attorney at law. Louisiana. If the domicile of the borrower is Louisiana, insert this language: PROPERTY SUBJECT TO SEIZURE IN LOUISIANA. In addition to your obligations and our rights under Section 14, Actions After Default, if for any reason we are unable to take possession of the property following default, you agree that we may, at our option, have the property judicially seized and sold under ordinary or executory process, whether in term of court or in vacation, to the highest bidder for cash, in accordance with applicable law. For CUNA Mutual Group 31

4 Chapter 4 whether in term of court or in vacation, to the highest bidder for cash, in accordance with applicable law. For executory process foreclosure purposes, you acknowledge to be indebted to us and confess judgment in our favor for all amounts that you may owe us that are secured by the property. To the extent permitted under applicable law, you waive: (a) the benefit of appraisal as provided under Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of Civil Procedure, and all other laws with regard to appraisal upon judicial sale; (b) the demand and three (3) days delay as provided under Articles 2639 and 2721 of the Louisiana Code of Civil Procedure; (c) the notice of seizure as provided under Article 2293 of the Louisiana Code of Civil Procedure; (d) the three (3) days delay provided under Articles 2331 and 2722 of the Louisiana Code of Civil Procedure; and (e) all other provisions provided under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil Procedure and all other Articles not specifically mentioned above. You agree that we may appoint a keeper of the property in the event of foreclosure. We additionally agree to hold you harmless from any and all claims for damages to persons or property as a result of the seizure of the property. Oregon. If the domicile of the borrower is Oregon, insert this language using no less than 10 point bold face capital letters: NOTICE FOR OREGON BORROWERS: WARNING UNLESS YOU PROVIDE US WITH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED HEREIN, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTEREST. THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT YOUR INTEREST. IF THE COLLATERAL BECOMES DAMAGED, THE COVERAGE WE PURCHASE MAY NOT PAY ANY CLAIM YOU MAKE OR ANY CLAIM MADE AGAINST YOU. YOU MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE THAT YOU HAVE OBTAINED PROPERTY COVERAGE ELSEWHERE. YOU ARE RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY US. THE COST OF THIS INSURANCE MAY BE ADDED TO THE LOAN BALANCE. IF THE COST IS ADDED TO THE LOAN BALANCE, THE INTEREST RATE ON THE LOAN WILL APPLY TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF COVERAGE MAY BE THE DATE YOUR PRIOR COVERAGE LAPSED OR THE DATE YOU FAILED TO PROVIDE PROOF OF COVERAGE. THE COVERAGE WE PURCHASE MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE YOU CAN OBTAIN ON YOUR OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW. OREGON STATUTE OF FRAUDS NOTICE. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY LENDER CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY LENDER TO BE ENFORCEABLE. Rhode Island. If the domicile of the borrower is Rhode Island then insert this language: You hereby represent and warrant to us that either (a) there is no outstanding automatic order under Chapter 15-5 of the Rhode Island General Laws against you relating to a complaint for dissolution of marriage, legal separation, annulment, custody or visitation, or (b) there is an outstanding automatic order under Chapter 15-5 of the Rhode Island General Laws against you relating to a complaint for dissolution of marriage, legal separation, annulment, custody or visitation, and the other party that is subject to just order has consented to, or the court which issued the automatic order has issued another order authorizing, your execution of this Agreement. 32 LOANLINER Small Business Lending User Guide

5 Business Credit Agreement Rider Washington. If the domicile of the borrower is Washington, insert this language using no less than 10 point bold face capital letters: WASHINGTON STATUTE OF FRAUDS NOTICE. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. Wisconsin. If the domicile of the borrower is Wisconsin then insert this language: NOTICE TO WISCONSIN BORROWERS. Neither of us agrees to have the Loans treated as consumer transactions within the meaning of any state laws. West Virginia. If the domicile of the borrower is West Virginia then insert this language: You promise that the loan made to you under the Business Credit and Continuing Security Agreement will not be used for agricultural purposes. CUNA Mutual Group 33

6 Chapter 4 34 LOANLINER Small Business Lending User Guide