DFTC Inc provides this sample document solely to illustrate... employed by other financing entities, and neither DFTC Inc nor...

DFTC Inc provides this sample document solely to illustrate... employed by other financing entities, and neither DFTC Inc nor...

DFTC Inc provides this sample document solely to illustrate policies and documents
employed by other financing entities, and neither DFTC Inc nor any of the organizations
that have provided these documents can be held responsible for their use or any claims
arising from their use. Your legal counsel, your accountant, and other professionals
should be consulted in all relevant matters.
COMMITMENT LETTER and LOAN AGREEMENT
DATE
Dear;
I am pleased to inform you that Eastern Maine Bank/CU has approved your application
for financing, subject to the following terms and conditions:
1.
Borrower:
2.
Amount of Loan:
$
3.
Purpose of Loan:
Loan proceeds will be used to
4.
Interest Rate, Term, and Repayment: This loan shall bear interest
at (Index + spread %) per annum. The rate will be adjusted XXX. The
term of the loan shall be for XXX years. Principal and interest shall be
repaid in equal monthly installments sufficient to amortize the loan over a
XXX year term.
Commitment Fee:
In consideration for this commitment, the Borrower
shall pay Lender a non-refundable origination fee of one (1) percent
( %) of the loan amount or $
. This fee shall be due and payable
upon Borrower’s acceptance of this commitment.
5.
6.
Security:
Borrowers shall grant to Lender as security for the loan:
(a)
A
mortgage in real property located at
(b)
A
security interest in all business assets of
(d)
The personal/corporate guarantee of
.
1
Conditions of the Loan:
Lender shall not disburse the loan
proceeds to Borrower unless at the time of closing this Commitment Letter
has not been breached, including the warranties in paragraph 11, and the
Borrower shall have:
(a)
Executed and delivered all instruments and documents in
connection with the closing of the loan in such form and
containing such substance as shall be satisfactory to Lender’s
counsel. The loan shall be subject to such further terms and
conditions and additional documents as our counsel deem
reasonable and necessary;
(b)
Granted Lender security on the collateral identified in Section 6
and executed appropriate documents in form and substance
satisfactory to Lender;
(c)
Delivered to Lender prior to closing an opinion of Borrower’s
counsel as to the existence and authority of Borrower and as to the
validity and enforce ability of the loan documents and also that
Borrower is in compliance with all applicable laws, regulations and
permits in the conduct of its business. Such opinion shall be
satisfactory to Lender’s counsel;
(d)
Prior to closing, have delivered to Lender a title certification
prepared by an attorney licensed in XXXX with respect to the
property constituting the collateral for the loan committed hereby.
Such certification shall not contain any exceptions unacceptable to
Lender. At Lender’s request, Borrower agrees to deliver to Lender
a title insurance commitment-naming Lender as insured in the
most recent ALTA forms, such commitment not containing any
exceptions unacceptable to Lender. The premium for such title
insurance shall be at Borrower’s expense;
(e)
Prior to closing, have delivered to Lender a satisfactory appraisal
on an “as completed basis” on land and building to be located in
(f)
Prior to closing, have delivered to Lender copies of all existing
mortgages, security agreements and noted to which Borrower is a
party for Lender’s review;
2
(g)
Provided evidence of construction financing by
Bank of $
on terms and conditions satisfactory
to Lender;
8.
Expenses:
Borrower shall pay Lender for all of Lender’s out of pocket
expenses in connection with the loan contemplated hereby, including but
not limited to the fees and disbursements of Lender’s counsel as well as
recording and files fees. Such expenses shall be payable by Borrower
whether or not the loan ever closes.
10.
Disbursement of Loan Proceeds:
closing.
11.
Borrower’s Warranties: In order to induce Lender to make the loan
provided for in this Commitment Letter, Borrower makes the following
Representations and Warranties which shall survive the execution and
delivery of the Promissory Note:
Loan proceeds shall be disbursed at
(a)
Borrower duly exists and is in good standing under the laws of the
State of XXX and Borrower through a named individual has been
validly authorized by all necessary action to execute and deliver
the loan documents;
(b)
At the time of closing, there shall be no outstanding liens, suits,
trusteeships, bankruptcies or court actions pending or threatened
against the Borrower of the property to be mortgaged hereunder.
In addition, Borrower’s financial condition, in the sole judgment of
Lender, shall not be materially impaired or changed between the
date hereof and closing. Should there be any such proceedings
involved the Borrower or should the Borrower’s financial
condition be so impaired or changed, Lender retains the right to
cancel this commitment without further liability to the Borrower;
(c)
Borrower and its principals have no other outstanding debt, except
those disclosed in the loan application;
(e)
The principals of the Borrower will not permit without the prior
written permission of the Lender any material change in the
ownership structure, control, or operation of the Borrower
including, but not limited to:
(i)
merger into or consolidation with any other person, firm,
partnership or corporation;
3
(f)
12.
(ii)
significant issuance of any shared of its capital stock or
partnership interests having ordinary voting power for the
election of members of the governing body of the
Borrower;
(iii)
changing the nature of its business as carried out at the date
hereof;
(iv)
substantial distribution, liquidation, dissolution or other
disposal of the assets or the interest of XXX.
The Loan committed hereby is subject to Borrower’s compliance
satisfactory to Lender with all applicable Federal, State and local
laws and ordinances pertaining to land use and with all approvals
and permits granted in connection with Borrower’s ownership and
operation of the property to be mortgage to Lender’s option, an
opinion of Borrower’s counsel. This loan is also subject to
Borrower’s providing Lender satisfactory evidence that Borrower
had undertaken reasonable inquiry in the light of best business and
land transfer principles and based on the facts surrounding the
mortgage property to determine that the mortgage property is free
of all hazardous and/or toxic waste, substances or materials and
that such substances or material do not exist in any quantities
which would require monitoring, reporting, abatement, remedial or
responsive action, permitting and/or licensing under Federal, State
or local law. At the request of Lender, Borrower shall obtain a
hazardous waste site assessment prepared by a qualified licensed
professional engineer, which shall be satisfactory in all respects to
Lender. In the event that such assessment or any other
investigation discloses the presence of such hazardous materials or
substances, on or in the mortgage premises in any amounts, Lender
shall have no obligation to make this loan.
Covenants of the Loan: The Loan Agreement shall contain other items
provisions obligating Borrower to:
(a)
(b)
Maintain its form and existence; pay all its taxes; and maintain its
property in good repair;
Maintain the insurance coverage set forth below, together with
such additional coverage as the Lender may require in its
discretion. All of the policies set forth below shall name Lender
may require in its discretion. All of the policies set forth below
shall name Lender as Mortgage and Loss Payee in case of loss and
shall contain such form and substance as shall be satisfactory to
4
Lender. Such insurance shall be issued by the company or
companies acceptable to Lender. Policy endorsement is also to
include Notice of Cancellation to Lender at least ten (10) days
prior to cancellation. At or before closing, Borrower shall deliver
to Lender either a certificate evidencing such insurance or a
duplicate original of the final policy;
(i)
Fire, hazard and extended coverage insurance in an amount
satisfactory to Lender;
(ii)
Product liability and workman compensation insurance in
amounts satisfactory to the Lender;
(iii)
Flood insurance of applicable;
Upon renewal of the policy or at such other time as Lender may request,
Borrower shall furnish Lender a certificate or insurance or a duplicate original
policy evidencing the required coverage’s.
(c)
Provide Lender with an assignment of life insurance on XXX
in the amount of $ XXX
(d)
Maintain proper business and accounting records in accordance
with generally accepted principles; authorize Lender’s access to
the records.
(e)
Provide Lender with annual financial statements including a profit
and loss statement and balance sheet prepared by management.
Personal tax returns, business tax returns and annual financial
statements shall be submitted within ninety (90) days of the close
of the Borrower’s fiscal year and shall be prepared by an
independent certified public accountant on a review basis and in
accordance with general accepted accounting principles;
If Eastern Maine Bank has not received financial reports, tax returns,
insurance verification, employment verification, or such other reports or
information as required under the terms and conditions of this Commitment
Letter and Loan Agreement the borrower may be assessed a default penalty
payable to holder in the amount of 5% of the monthly payment of principal
and interest for each month that required information remains overdue.
(f)
Comply with applicable federal regulations regarding procurement,
conflicts of interest, political activities, and hiring of personnel;
federal, state, local laws, regulations, and ordinances; as well as
with the terms of the other financing agreements entered into in
conjunction with Lender’s investment;
5
(g)
Use the funds for purposes represented to Lender in the loan
request;
(h)
Notify Lender of any breach of the Loan Agreement;
(i)
Certify annually to Lender as to its compliance with the Loan
Agreement;
(j)
Pay all legal, accounting, and other reasonable costs incurred by
lender in collecting the loan, as well as any unusual servicing
costs.
(k)
Comply with all terms of all other agreements to which Borrower
is a party and notify Lender of any breaches of such other
agreements.
The Loan Agreement shall contain among other items provisions prohibiting
Borrower, without Lender’s prior consent, from:
13.
(a)
Declaring any dividends or distribution of, or redeeming or issuing
any securities or guarantees;
(b)
Amending its Charter or By-Laws or changing its fiscal years;
(c)
Liquidating, dissolving, merging, or transferring all or substantially
all of its assets.
Defaults:
Borrower shall be in default upon a breach of the Loan
Agreement, specifically including, but not limited to:
(a)
Breach of any of the terms of covenants contained in this
Commitment Letter and Loan Agreement;
(b)
Material misrepresentations made by Borrower to Lender;
(c)
Failure to punctually pay the Note when and is due;
(d)
Failure to punctually pay other loans when and as due;
(e)
Bankruptcy or transfer of assets in bulk;
(f)
Failure to cure other defaults within a grace period of fifteen (15)
days;
6
14.
Transfer or Assignment: This commitment and the loan committed
hereby shall not be transferred or assigned without the express written
consent of Lender.
15.
Prepayment: Borrower shall have the right to prepay the outstanding
loan balance in full at any time during the course of the loan without
prepayment penalty.
16.
No Adverse Change: This commitment may be terminated by Lender
any time prior to closing upon discovery, by Lender, of a material adverse
change in or any misrepresentations or erroneous statements about the
proposed project or in or about Borrower’s position with respect to
solvency, credit worthiness, ability to carry out the proposed project,
government regulation, or an other material factor. In the event of such
termination, Lender is entitled to collect and retain all commitment fees
herein required of Borrower. Such termination shall become effective
upon the mailing of notice of termination by Lender by certified mail to
Borrower at the address shown on this commitment.
17.
Prior Agreements, Changes: This commitment supersedes all prior
representations, agreements and other prior dealings between the parties,
written or oral. The terms of this commitment may not be waived or
altered orally or in writing, directly or by implication, by correspondence
or otherwise, expect by a written amendment signed by all parties hereto
and explicitly expressing the intention to amend this commitment.
18.
Closing: The loan committed hereby will be closed at Eastern Maine
CU offices shown at the head of this letter within one hundred twenty
(120) days of the date hereof, unless said date is extended in writing by
Lender at its sole option. In addition, Lender may require that all
documentation to be prepared or produced by Borrower shall be first
submitted to Lender’s counsel; after such submission a closing date will
be set, after consultation with the Borrower, such dates to be not less than
five (5) business days after such submission.
19.
Notwithstanding anything contained in the previous paragraph, this
commitment shall expire unless accepted within ten days of the date
hereof and return executed with so much of the commitment fee then due.
To the extent that the terms and conditions stated herein are not incorporated into the loan
documents, this commitment letter shall survive the loan closing and will govern our
relationship for so long as the loan committed hereby, together with interest and fees,
remain outstanding; provided however, that in the event of inconsistencies between this
commitment letter and the loan documents the loan documents shall control.
7
Sincerely,
Eastern Maine CU
Dana P. Sumner, Senior Commercial Loan Officer and Executive Vice President
Intending to be legally bound, the Borrower acknowledges receipt of the foregoing
commitment and acceptance of and agreement to its terms and conditions.
Dated:
By:
Authorized signer:
Dated:
By:
Individual Guarantors:
8
DFTC Inc provides this sample document solely to illustrate policies and documents
employed by other Financial Institutions, and neither DFTC Inc nor any of the
organizations that have provided these documents can be held responsible for their
use or any claims arising from their use. Your legal counsel, your accountant, and
other professionals should be consulted in all relevant matters.
GUARANTY
GUARANTY
GUARANTY dated as of .................., 200 ....... made by ....................., a corporation
organized under the laws of ......................... (the "Guarantor"), in favor of .............["the
Lender"].
PRELIMINARY STATEMENTS: The Lender has entered, or may from time to time
enter, into agreements or arrangements with ...................., a corporation organized under
the laws of .................., (the "Counterparty"), providing for credit extensions or financial
accommodations to the Counterparty of any kind whatsoever, including but not limited to
the making of loans, advances or overdrafts, whether or not secured, discount or purchase
of notes, securities or other instruments or property, creation of acceptances, issuance or
confirmation of letters of credit, guaranties or indemnities, entering into foreign exchange
or precious metals contracts or interest rate or currency swap or protection agreements or
any other kind of contract or agreement under which the Counterparty may be indebted to
the Lender in any manner (all of the foregoing agreements or arrangements being the
"Transactions" and any writing evidencing, supporting or securing a Transaction being a
"Transaction Document"). The Guarantor owns .........% of the stock or other ownership
interests of the Counterparty and is financially interested in its affairs.
Therefore, in consideration of the Guaranty and in order to induce the Lender to enter
into or extend or give financial accommodation with respect to the Transactions, the
Guarantor agrees as follows:
Section 1. Guaranty of Payment. The Guarantor unconditionally and irrevocably
guarantees to the Lender and its successors, endorsees, transferees and assigns, as
primary obligor and not merely as surety, the punctual payment of all sums now owing or
that may in the future be owing by the Counterparty with respect to the Transactions,
when the same are due and payable, whether on demand, at stated maturity, by
acceleration or otherwise, and whether for principal, interest purchase price, margin or
additional payments, fees, expenses, costs of replacement transactions, indemnification or
otherwise (all of the foregoing sums being the "Liabilities"). The Liabilities include,
without limitation, interest accruing after the commencement of a proceeding under
Bankruptcy, insolvency or similar laws of any jurisdiction at the rate or rates provided in
the Transaction Documents. This Guaranty is a guaranty of payment and not of collection
only. The Lender shall not be required to exhaust any right or remedy or take any action
against the Counterparty or any other person or entity or any collateral. The Guarantor
4-8
agrees that, as between the Guarantor and the Lender, the Liabilities may be declared to
be due and payable for the purposes of this Guaranty, notwithstanding any stay,
injunction or other prohibition that may prevent, delay or vitiate any declaration as
regards the Counterparty and that in the event of a declaration or attempted declaration,
the Liabilities shall immediately become due and payable by the Guarantor for the
purposes of the Guaranty.
Section 2. Guaranty Absolute. The Guarantor guarantees that the Liabilities shall be
paid strictly in accordance with the terms of the Transactions regardless of any law,
regulation or order now or hereafter in effect of any jurisdiction affecting any of such
terms or the rights of the Lender with respect thereto. The liability of the Guarantor under
this Guaranty is absolute and unconditional irrespective of: (a) any change in the time,
manner or place of payment, of or in any other terms of, all or any of the Transaction
Documents or Liabilities, or any other amendment or waiver of or any consent to
departure from any of the terms of any Transaction Document or Liability; (b) any
release or amendment or waiver of, or consent to departure from, any other guaranty or
support document, or any exchange, release or nonperfection of any collateral, for all or
any of the Transaction Documents or Liabilities; (c) any present or future law, regulation
or order of any jurisdiction (whether of right or in fact) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any term of any transaction
Document of Liability; (d) without being limited by the foregoing, any lack of validity or
enforceability of any Transaction Document or Liability of any failure to receive an
governmental approval relating thereto;(e) any other defense whatsoever that might
constitute a defense available to, or discharge of, the Counterparty or a guarantor
(including, without limitation, the Bankruptcy or reorganization of the Counterparty).
Section 3. Guaranty Irrevocable. This Guaranty is a continuing guaranty and shall
remain in full force and effect until payment in full of all Liabilities and other amounts
payable under this Guaranty and until the Transactions are no longer in effect.
Section 4. Reinstatement. This Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Liabilities is rescinded or
must otherwise be returned by the Lender on the insolvency, Bankruptcy or
reorganization of the Counterparty or otherwise, all as though the payment had not been
made.
Section 5. Subrogation. The Guarantor shall not exercise any rights that it may acquire
by way of subrogation, by any payment made under this Guaranty or otherwise, until all
the Liabilities have been paid in fill and the Transactions are no longer in effect; provided
that if the Guarantor is an "insider" of the Counterparty, as such term is defined in
Section 101 of the Federal Bankruptcy Code, the Guarantor hereby irrevocably waives
any and all right to which it may be entitled, by operation of law or otherwise, upon
making payment hereunder, to be subrogated to the rights of the Lender against the
Counterparty with respect to such payments or otherwise be reimbursed, indemnified or
exonerated by the Counterparty in respect thereof. If any amount is paid to the Guarantor
on account of subrogation rights under this Guaranty at any time when all the Liabilities
4-8
have not been paid in full, the amount shall be held in trust for the benefit of the Lender
and shall be promptly paid to the Lender to be credited and applied to the Liabilities,
whether matured or unmatured or absolute or contingent, in accordance with the terms of
the Transactions. If the Guarantor makes payment to the Lender of all or any part of the
Liabilities and all the Liabilities are paid in full and the Transactions are no longer in
effect, the Lender shall (subject to the proviso in the first sentence of this Section), at the
Guarantor’s request, execute and deliver to the Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantor of an interest in the Liabilities resulting from the payment.
Section 6. Subordination. Without limiting the Lender’s rights under any other
agreement, any liabilities owed by the Counterparty to the Guarantor in connection with
any extension of credit or financial accommodation by the Guarantor to or for the account
of the Counterparty, including but not limited to interest accruing at the agreed contract
rate after the commencement of a Bankruptcy or similar proceeding, are hereby
subordinated to the Liabilities, and such liabilities of the Counterparty to the Guarantor, if
the Lender so requests, shall be collected, enforced and received by the Guarantor as
trustee for the Lender and shall be paid over to the Lender on account of the Liabilities
but without reducing of affecting in any manner the liability of the Guarantor under the
other provisions of this Guaranty.
Section 7. Payments Generally. All payments by the Guarantor shall be made in the
manner, at the place and in the currency (the "Payment Currency") required by the
Transaction Documents
Section 8. Certain Taxes. (a) The Guarantor further agrees that all payments to be made
hereunder shall be made without setoff or counterclaim and free and clear of, and without
deduction for, any taxes, levies, imposts, duties, charges, fees, deductions, withholdings
or restrictions or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed by any country or by any political subdivision or taxing
authority thereof or therein ("Taxes"), but excluding taxes imposed on income or capital
of the Lender by the jurisdiction(or any political subdivision thereof) under the laws of
which the Lender is organized, or in which its principal place of business or lending
office is located.
(b) If the Guarantor shall be required by law to withhold any Taxes from any amounts
payable to the Lender hereunder, (i) the amounts so payable to the Lender shall be
increased to the extent necessary to yield to the Lender (after payment of all taxes) the
amounts payable hereunder in the full amount so to be paid, (ii) the Guarantor shall make
such withholdings, and (iii) the Guarantor shall pay the full amount withheld to the
relevant tax or other authority in accordance with applicable law. Whenever any Tax is
paid by the Guarantor, as promptly as possible thereafter the Guarantor shall send the
Lender an official receipt showing payment thereof, together with such additional
documentary evidence as may be required from time to time by the Lender.
4-8
(c) In addition, the Guarantor agrees to pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery, registration, performance and
enforcement of this Guaranty (hereinafter referred to as "Other Taxes").
(d) The Guarantor will indemnify the Lender for, reimburse the Lender promptly upon
demand, the full amount of any Taxes or Other Taxes (including, without limitation, any
Taxes or other Taxes imposed by any jurisdiction on amounts payable under this Section)
paid by the Lender (as the case may be), and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly and legally asserted.
(e) Without prejudice to the survival of any other agreement of the Guarantor hereunder,
the agreements and obligations of the Guarantor contained in this Section shall survive
the payment in full of all amounts due on the Transactions.
Section 9. Representations and Warranties. (a) The Guarantor represents and warrants
that the execution, delivery and performance of this Guaranty: (i) has been duly
authorized by all necessary corporate action; (ii) does not violate any agreement,
instrument, law, regulation or order applicable to the Guarantor or its charter or bylaws;
(iii) to its best knowledge and belief does not require the consent or approval of any
person or entity, including but not limited to any governmental authority, or any notice of
filing or registration of any kind; and (iv) is the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms, except to the
extent that enforcement may be limited by applicable Bankruptcy, insolvency and other
similar laws affecting creditors’ rights generally or by general principles of equity.
(b) The Guarantor is a corporation duly organized and validly existing under the laws of
.................., and has all requisite corporate power and authority to conduct its business, to
own its properties and to execute and deliver, and perform all of its obligations under,
this Guaranty.
(c) There are no actions, suits or proceedings pending or, to the knowledge of the
Guarantor, threatened against or affecting the Guarantor before any court, governmental
agency or arbitrator, that may, in any one case or in the aggregate, materially adversely
affect the financial condition, operations, properties or business of the Guarantor or the
ability of the Guarantor to perform its obligations under this Guaranty.
Section 10. Covenants. For so long as this Guaranty remains in effect, the Guarantor
will:
(a) Maintain ownership of ........ percent of the voting shares or other ownership interests
of the Counterparty; and
4-8
(b) Furnish to the Lender, or cause the Counterparty to furnish to the Lender, such
information respecting the condition or operations, financial or otherwise, of the
Guarantor or the Counterparty, as the Lender may from time to time reasonably request.
Section 11. Remedies Generally. The remedies provided in this Guaranty are
cumulative and not exclusive of any remedies provided by law.
Section 12. Formalities. The Guarantor waives presentment, notice of dishonor, protest,
notice of acceptance of this Guaranty or incurrence of any Liability and any other
formality with respect to any of the Liabilities of this Guaranty.
Section 13. Amendments and Waivers. No amendment or waiver or any provision of
this Guaranty, nor consent to any departure by the Guarantor therefrom, shall be effective
unless it is in writing and signed by the Lender, and then the waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given. No
failure on the part of the Lender to exercise, and no delay in exercising, any right under
this Guaranty shall operate as a waiver or preclude any other or further exercise thereof
or the exercise of any other right.
Section 14. Expenses. The Guarantor shall reimburse the Lender on demand for all costs,
expenses and charges, including without limitation fees and charges of external legal
counsel, for the Lender in connection with the performance or enforcement of this
Guaranty. The obligations of the Guarantor under this Section shall survive the
termination of this Guaranty.
Section 15. Assignment. This Guaranty shall be binding on, and shall inure to the benefit
of the Guarantor, the Lender and their respective successors and assigns, provided that
the Guarantor may not assign or transfer its rights or obligations under this Guaranty,
Except to the extent restricted by the relevant Transaction Documents, the Lender may
assign, sell participations in or otherwise transfer its rights with respect to the
Transactions and the Transaction Documents to any other person or entity and the other
person or entity shall then become vested with all the rights granted to the Lender in this
Guaranty or otherwise.
Section 16. Captions. The headings and captions in this Guaranty are for convenience
only and shall not affect the interpretation or construction of this Guaranty.
Section 17. Governing Law, etc. THIS GUARANTY SHALL BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. THE GUARANTOR CONSENTS TO
THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE STATE OR
FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK. SERVICE OF
PROCESS BY THE LENDER IN CONNECTION WITH ANY SUCH DISPUTE
SHALL BE BINDING ON THE GUARANTOR IF SENT TO THE GUARANTOR BY
REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS OTHERWISE
SPECIFIED BY THE GUARANTOR FROM TIME TO TIME. THE GUARANTOR
WAIVES ANY RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL. TO THE
4-8
EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OR ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT,
EXECUTION OR OTHERWISE), THE GUARANTOR HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed and
delivered by its duly authorized officer.
Lender: …………………………………….
By: ……………………………………….
Title: …………………………………….
.
GUARANTOR:
Name of Guarantor
............................................
............................................
Address: …………………………………
4-8
LOAN CLOSING DOCUMENTS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Loan Approval
Commitment Letter
Loan Agreement
Promissory note
Mortgage
Security Agreement
Assignment of Leases and Rents
UCC – Search – before closing
UCC – Search – after closing
Tax and Judgment Lien Search
UCC Financing Statement
Certificates of Insurance
Guaranties
Opinion of Counsel
Settlement Statement
REAL ESTATE TRANSACTION
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Title Search
Mechanics Lien Affidavit
Title Opinion Letter
Notice to Senior Lenders
Landlords and Mortgagees Waiver
ALTA/Category 1 Survey
Flood Insurance Determination
Flood Insurance if Applicable
Subordination Agreement (if applicable)
Title Insurance Policy
Environmental Compliance and Indemnity Agreement
ERAQ
OTHER SUPPORTING DOCUMENTS
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
Articles of Incorporation
Copy of Bylaws
Articles of Organization
Operating Agreement (LLC)
Good Standing Documents
Borrowing Resolution
Business Permits
Patriot Act Compliance
DFTC Inc provides this sample document solely to illustrate policies and documents
employed by other financial institutions, and neither DFTC Inc nor any of the
organizations that have provided these documents can be held responsible for their
use or any claims arising from their use. Your legal counsel, your accountant, and
other professionals should be consulted in all relevant matters.
MORTGAGE
KNOW ALL MEN BY THESE PRESENTS, That
Borrower’s
Name(s)
, (“Grantor”), for consideration paid, grants to XXX CU
(“Grantee”), with MORTGAGE COVENANTS, to secure of Fifty thousand and no/100
Dollars ($50,000) as provided in the terms of a Promissory Note of even date from
Borrower or any renewals or extensions thereof, as well as to secure the payment of all
future advances made to (Borrower) at the option of Grantee, its successors and assigns,
to the Grantor, Grantor’s successors and assigns, in accordance with the terms and
conditions of said future advances, all of which advances may be evidenced by notes,
endorsements, guarantees, and any form of indebtedness, direct or indirect, written or
oral.
TOGETHER WITH all machinery, equipment, apparatus, heating, plumbing and
light fixtures, and other fixtures now or hereafter attached to or used in connection with
said premises.
TOGETHER WITH all rights, easements, privileges and appurtenances belonging
to the premises herein above described including, but not limited to, all leases, rents,
issues and profits thereof and all awards and payments, and the rights to receive the same,
which may be made with respect to the premises as a result of the exercise of the right or
eminent domain, or the alteration of the grade of any street. The Grantor agrees to
execute and deliver, from time to time, such further instruments as may be requested by
Grantee to confirm any and all such assignments to the Grantee to of any such rents,
issues, profits, awards, and payments.
1.The Grantor further covenants and agrees that this instrument shall
constitute a security agreement with respect to any and all machinery, equipment ,
chattels, articles of personal property, and fixtures now owned by Grantor
hereinafter acquired and all additions, accessions, substitutions and replacements
thereto and therefore, any and all of which are hereinafter referred to as the
“Collateral” and Grantor hereby grants and conveys to the Grantee, its successors
and assigns, a security interest therein. Upon default of any term, condition or
covenant of this mortgage and acceleration of any indebtedness hereby secured,
the Grantee may, at its discretion, require the Grantor to assemble the collateral
and make it available to the Grantee at a place reasonably convenient to both
parties to be designated by the Grantee. The Grantee shall give the Grantor notice,
by registered mail, postage prepaid, of the time and place of any public sale of
any of the Collateral or of the time of any private sale or other intended
disposition thereof is to be made by sending notice to the Grantor at least five (5)
4-5
days before the time of the sale or other disposition, which provisions for notice
the Grantor and Grantee agree are reasonable; provided, however, that nothing
herein shall preclude the Grantee from proceeding as to both real and personal
property in accordance with Grantee’s rights and remedies in respect of the real
property. Grantor agrees that all rights of the Grantee as to said collateral and as
to said real estate, rights and interest appurtenant thereto, the Grantee may sell the
Collateral or any part thereof, either separately from or together with the said real
estate, rights and interest appurtenant thereto, may be exercised together or
separately and further agrees that in exercising this power of sale as to the
Collateral and as to said real estate, and rights and interest appurtenant thereto, or
any part thereof, either separately from or together with the said real estate, rights
and interest appurtenant thereto, or any part thereof, all as the Grantee may in its
discretion elect.
2. It is an additional condition of the Grantor herein for breach of which
foreclosure may be claimed and for breach of which all indebtedness secured
hereby may be declared due and payable at once, that title to the within described
mortgaged premises shall not pass from Grantor by deed, mortgage, or operation
of law, or from any subsequent title holder, either voluntarily or involuntarily and
that Grantor shall not assign, transfer or convey any interest in the premises or
suffer or permit any encumbrance thereof. This condition shall continue until all
indebtedness and obligations secured hereby are satisfied, and permission given,
or election not to foreclose or accelerate said indebtedness by Grantee, its
successors or assigns, as to any one such transfer, shall not constitute a waiver of
any rights of Grantee, its successors and assigns, as to any subsequent such
transfer of title as to which this condition shall remain in full force and effect. The
term title as used herein shall mean the estate of the Grantor subject to the lien of
the Mortgage.
3. This Mortgage is upon the statutory condition, for any breach of which
and for any breach of any term, condition, or provision of the Mortgage or any
instrument that it secures, the Grantee shall have the remedies provided by law.
The Grantee shall have all statutory powers of sale with respect to this Mortgage,
to the extent permitted by law.
4. This Mortgage is subject to a prior mortgage and to a prior Security
Interest in
given to
and recorded or to be recorded in the county registry of deeds, securing the
principal amount of $ XXX plus interest.
The Grantor hereby agrees that a breach of the conditions of the prior mortgage to
Bank of Texas or of any mortgage securing an interest
in Grantor’s residence shall constitute a breach of the conditions of this Mortgage
and that any default by Grantor under any mortgage by virtue of which grantee
thereunder shall have the right to claim a foreclosure thereof and to accelerate the
time for payment of the indebtedness secured thereby shall constitute a breach of
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the condition of this Mortgage and all indebtedness secured hereby may be
declared due and payable at once. The Grantor herein hereby transfers and assigns
to the Grantee herein, its heirs and assigns, the Grantor’s equity of redemption or
said prior mortgage; it’s right to receive any surplus resulting from a foreclosure
sale on account of any prior mortgage; the right to demand assignment of said
mortgage and the note secured by same. A copy of any notice received by the
Grantor relating to any default or notice thereof under said prior mortgage shall be
promptly furnished to the Grantee. Any payment made by the Grantee, his heirs
and assigns, on the prior mortgage shall at the option of the Grantee, be deemed to
be an advance necessary to protect the Grantee’s security, and shall thereupon
become a part of the indebtedness secured by this Mortgage. Grantor shall make
the payments and observe all of the conditions called for by the prior mortgage in
a prompt manner, and if Grantor does not do so, Grantee shall have the right (but
not the obligation) to make any such payment directly to the holder of such prior
mortgage, or otherwise cure such default, and any sums so advanced by Grantee
together with all costs and expenses incurred in connection therewith, including
reasonable attorneys’ fees, (1) shall bear interest at the rate of 5% over the rate
applicable to the note secured hereby from the date of the advancement until paid,
(2) shall be immediately due and payable by Grantor to Grantee, and (3) shall be
and become a part of the indebtedness secured hereby, as aforesaid. The right of
the Grantee to make such payments or otherwise cure defaults on such prior
mortgage is solely for the protection of the Grantee herein, and may not be relied
upon by any such prior mortgage or any other third party. To the extent that any
such payments or advances are made and used directly or indirectly, to pay off,
discharge or satisfy in whole or in part, any such prior mortgage then the Grantee
shall be subrogated to such prior mortgage lien and to any additional security held
by the holder thereof, and shall have the benefit of the priority of all of the same.
The rights and remedies of the Grantee under this paragraph shall be cumulative
of all of the other rights and remedies of the Grantee under law and under this
Mortgage and any other documents evidencing, securing or governing the loan
secured hereby. The occurrence of any modification, renewal, extension,
restructuring or refinancing of the indebtedness secured by said prior mortgage
without the prior written consent of the Grantee shall constitute an event by
default hereunder, and shall entitle the Grantee to declare the entire indebtedness
secured hereby to be immediately due and payable without notice to Grantor.
5. Grantor shall well and truly perform, or cause to be performed, in
punctual manner, all the terms, conditions and agreements that are the obligation
of Grantor contained in a Loan Agreement of even date herewith between Grantor
and Grantee and any default thereunder shall constitute a default under this
Mortgage and Security Agreement and shall entitle Grantee to demand immediate
to demand immediate payment of the entire indebtedness secured hereby.
6. This Mortgage is not assumable by or transferable to any third party.
This mortgage and debt hereby secured shall remain the liability of the Grantor
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until full payment of all indebtedness secured hereby is made to Grantee in
accordance with the terms and conditions hereof.
This Mortgage shall also serve as a financing statement with respect to any
and all fixtures of the Grantor (Debtors), whether now owned or hereafter
acquired, which are or may become affixed to the above described premises.
Information concerning this security interest in fixtures may be obtained from the
Grantee (Secured Party) at 245 Millers Lane, Fremont TX 89776; the mailing
address of the Grantor (Debtors) is
Proceeds of Collateral (including insurance proceeds) are also covered, although
no disposition of Collateral by Grantor (Debtor) is thereby authorized.
7. Grantor shall well and truly performed, in a punctual manner, all terms
conditions and agreements that are the obligations of Grantor contained in a Loan
Agreement dated
between Grantor and Grantee and any
default thereunder shall constitute a default under this Mortgage and Security
Agreement and shall entitle Grantee to demand immediate payment of the entire
indebtedness hereby.
IN WITNESS WHEREOF,
instrument this
of
have executed this
.
WITNESS:
Borrower
Borrower
STATE OF Texas
COUNTY OF
SS.
Then personally appeared the above-named
acknowledged the foregoing instrument to be their free act and deed.
and
Before me,
Notary Public/Attorney-at-Law
Print Name:
My commission expires:
4-5
DFTC Inc provides this sample document solely to illustrate policies and documents
employed by other financial institutions, and neither DFTC Inc nor any of the
organizations that have provided these documents can be held responsible for their use or
any claims arising from their use. Your legal counsel, your accountant, and other
professionals should be consulted in all relevant matters.
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
XXX CU, the sum of
and no/11 Dollars ($0,000.00), with interest from
date hereof until paid on the outstanding principal balance hereof, computed at the rate of
percent (.0%) per annum (Interest will be calculated using a 365 year). Principal
and interest, amortized over fifteen ( ) years, shall be payable as follows: (a) on the XX
day of each month hereafter commencing XX , continuing on the same day of each
month thereafter continuing through XX , consecutive monthly payments of principal and
interest in the amount of ($
) shall be due and payable, and (b) a final
payment of all remaining principal shall be due and payable on the XX day of XX.
Any payment of principal and interest which is not paid when due shall thereafter until
paid bear interest at the rate herein above set forth, and in addition, time of payment
being of the essence, the holder of this note may collect a late charge not to exceed five
cents for each dollar of each payment more than fifteen (15) days in arrears. Failure by
the holder to collect one such late charge shall not be deemed a waiver by the holder of
its rights to collect late charges for any other instance of late payment.
All payments due hereunder shall be made to the XXX CU, 245 Millers Lane,
Fairmont TX, 07885, or to such other parties or addresses as the holder hereof may from
time to time designate in writing to the maker or other parties liable therefore. This note
evidences a loan for business and commercial purposes and not personal, family,
household or agricultural purposes.
Provided that at least thirty (30) days prior notice is given in writing to holder,
maker shall have the right to prepay all or any part of the unpaid principal balance hereof
without premium or penalty.
This note is subject to the condition that at no time shall the maker hereof be
obligated or required to pay interest at a rate which could subject the holder hereof to
either civil or criminal liability, forfeiture or loss of principal, interest or other sums as a
result of being in excess of the maximum interest rate which maker is permitted by law to
contract or agree to pay or which the holder hereof is permitted to receive. If by the terms
of this Note, maker is at any time required or obligated to pay interest at a rate in excess
of such maximum rate, the rate of interest under the Note shall be deemed to be
simultaneously reduced to such maximum rate for so long as such maximum rate shall be
in effect and shall thereafter be payable at the rate herein provided.
In the case of default in the payment of any payment due herein including default
in the payment of any applicable late charge or in the case of any default under the terms
4-4
of the Commitment Letter and Loan Agreement executed by the Maker in connection
with the loan evidence by this Note, and such default continues for a period of fifteen
days or in a case of a default in any term or condition of the Security Agreements of even
date herewith given as security herefor or in the case of default in any term or condition
of any document given or which may from time to time be given a security for this Note,
the holder thereof, at its option, at any time thereafter, may declare due and payable at
once the entire principal balance hereof, accrued interest and late charges, as applicable.
If the Holder of this Note has not received the full amount of any monthly
payment by the end of fifteen calendar days after the date that it is due or the Holder has
not received financial reports, tax returns, insurance verification, employment
verification, or such other reports or information that maker is required to furnish to the
Holder under the terms of the Commitment Letter and Loan Agreement executed by
Maker in connection with the loan evidenced by this Note within fifteen (15) calendar
days that the same may be due under the terms of the Commitment Letter and Loan
Agreement, the Maker shall pay a late charge to Holder in the amount of 5% of the
monthly payment of principal and interest for each month that the payment or other
required materials remain overdue.
The maker and all other parties liable hereafter, whether principal, guarantor,
endorser or otherwise, hereby severally waive demand, notice and protest, and waive all
recourse to suretyship and guarantor ship defenses generally, including, but not limited
to, any extension of time for payment or performance which may be granted to the
makers or to any other reliable party, any modifications or amendments to this to this
promissory note or on any other documents securing payment performance hereof, and
act or omission to act by or on behalf of the holder hereof, any release of security, any
release of liable party or parties, and all other indulges of any type which may be granted
by the holder hereof to the maker or any other party liable hereof, and do also agree to
pay all costs of collection of the indebtedness evidenced hereby , including reasonable
attorney’s fees which may be incurred in connection therewith.
If any obligation or portion of the promissory note is determined to be invalid or
unenforceable under law, it shall not affect the validity or enforcement of the remaining
obligations or portions hereof. The terms and provision hereof shall be constructed
pursuant to the laws of the State of Ohio. All of the obligations and promises herein are
the joint and several obligations and promises of the undersigned.
4-4
This promissory note is secured by Mortgage and Security Agreements given on
date herewith by the undersigned to XXX CU.
WITNESS:
By:
Borrower’s Name
Title
4-4
Definitions:
UCC – Article 9
(1) "Accession" means goods that are physically united with other
goods in such a manner that the identity of the original goods is not lost.
(2) "Account", except as used in "account for", means a right to
payment of a monetary obligation, whether or not earned by
performance, (i) for property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of, (ii) for services rendered or
to be rendered, (iii) for a policy of insurance issued or to be issued, (iv)
for a secondary obligation incurred or to be incurred, (v) for energy
provided or to be provided, (vi) for the use or hire of a vessel under a
charter or other contract, (vii) arising out of the use of a credit or charge
card or information contained on or for use with the card, or (viii) as
winnings in a lottery or other game of chance operated or sponsored by
a State, governmental unit of a State, or person licensed or authorized
to operate the game by a State or governmental unit of a State. The
term includes health-care-insurance receivables. The term does not
include (i) rights to payment evidenced by chattel paper or an
instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv)
investment property, (v) letter-of-credit rights or letters of credit, or (vi)
rights to payment for money or funds advanced or sold, other than
rights arising out of the use of a credit or charge card or information
contained on or for use with the card.
(3) "Account debtor" means a person obligated on an account, chattel
paper, or general intangible. The term does not include persons
obligated to pay a negotiable instrument, even if the instrument
constitutes part of chattel paper.
(4) "Accounting", except as used in "accounting for", means a record:
(A) authenticated by a secured party;
(B) indicating the aggregate unpaid secured obligations as of a date
not more than 35 days earlier or 35 days later than the date of the
record; and
(C) identifying the components of the obligations in reasonable detail.
(5) "Agricultural lien" means an interest, other than a security interest,
in farm products:
(A) which secures payment or performance of an obligation for:
(i) goods or services furnished in connection with a debtor's farming
operation; or
(ii) rent on real property leased by a debtor in connection with its
farming operation;
(B) which is created by statute in favor of a person that:
(i) in the ordinary course of its business furnished goods or services
to a debtor in connection with a debtor's farming operation; or
(ii) leased real property to a debtor in connection with the debtor's
farming operation; and
(C) whose effectiveness does not depend on the person's possession
of the personal property.
(6) "As-extracted collateral" means:
(A) oil, gas, or other minerals that are subject to a security interest
that:
(i) is created by a debtor having an interest in the minerals before
extraction; and
(ii) attaches to the minerals as extracted; or
(B) accounts arising out of the sale at the wellhead or minehead of oil,
gas, or other minerals in which the debtor had an interest before
extraction.
(7) "Authenticate" means:
(A) to sign; or
(B) to execute or otherwise adopt a symbol, or encrypt or similarly
process a record in whole or in part, with the present intent of the
authenticating person to identify the person and adopt or accept a
record.
(8) "Bank" means an organization that is engaged in the business of
banking. The term includes savings banks, savings and loan associations,
credit unions, and trust companies.
(9) "Cash proceeds" means proceeds that are money, checks, deposit
accounts, or the like.
(10) "Certificate of title" means a certificate of title with respect to
which a statute provides for the security interest in question to be
indicated on the certificate as a condition or result of the security
interest's obtaining priority over the rights of a lien creditor with respect
to the collateral.
(11) "Chattel paper" means a record or records that evidence both a
monetary obligation and a security interest in specific goods, a security
interest in specific goods and software used in the goods, a security
interest in specific goods and license of software used in the goods, a
lease of specific goods, or a lease of specific goods and license of
software used in the goods. In this paragraph, "monetary obligation"
means a monetary obligation secured by the goods or owed under a
lease of the goods and includes a monetary obligation with respect to
software used in the goods. The term does not include (i) charters or
other contracts involving the use or hire of a vessel or (ii) records that
evidence a right to payment arising out of the use of a credit or charge
card or information contained on or for use with the card. If a
transaction is evidenced by records that include an instrument or series
of instruments, the group of records taken together constitutes chattel
paper.
(12) "Collateral" means the property subject to a security interest or
agricultural lien. The term includes:
(A) proceeds to which a security interest attaches;
(B) accounts, chattel paper, payment intangibles, and promissory
notes that have been sold; and
(C) goods that are the subject of a consignment.
(13) "Commercial tort claim" means a claim arising in tort with
respect to which:
(A) the claimant is an organization; or
(B) the claimant is an individual and the claim:
(i) arose in the course of the claimant's business or profession; and
(ii) does not include damages arising out of personal injury to or the
death of an individual.
(14) "Commodity account" means an account maintained by a
commodity intermediary in which a commodity contract is carried for a
commodity customer.
(15) "Commodity contract" means a commodity futures contract, an
option on a commodity futures contract, a commodity option, or another
contract if the contract or option is:
(A) traded on or subject to the rules of a board of trade that has been
designated as a contract market for such a contract pursuant to
federal commodities laws; or
(B) traded on a foreign commodity board of trade, exchange, or
market, and is carried on the books of a commodity intermediary for a
commodity customer.
(16) "Commodity customer" means a person for which a commodity
intermediary carries a commodity contract on its books.
(17) "Commodity intermediary" means a person that:
(A) is registered as a futures commission merchant under federal
commodities law; or
(B) in the ordinary course of its business provides clearance or
settlement services for a board of trade that has been designated as a
contract market pursuant to federal commodities law.
(18) "Communicate" means:
(A) to send a written or other tangible record;
(B) to transmit a record by any means agreed upon by the persons
sending and receiving the record; or
(C) in the case of transmission of a record to or by a filing office, to
transmit a record by any means prescribed by filing-office rule.
(19) "Consignee" means a merchant to which goods are delivered in a
consignment.
(20) "Consignment" means a transaction, regardless of its form, in
which a person delivers goods to a merchant for the purpose of sale and:
(A) the merchant:
(i) deals in goods of that kind under a name other than the name of
the person making delivery;
(ii) is not an auctioneer; and
(iii) is not generally known by its creditors to be substantially
engaged in selling the goods of others;
(B) with respect to each delivery, the aggregate value of the goods is
$1,000 or more at the time of delivery;
(C) the goods are not consumer goods immediately before delivery;
and
(D) the transaction does not create a security interest that secures an
obligation.
(21) "Consignor" means a person that delivers goods to a consignee in
a consignment.
(22) "Consumer debtor" means a debtor in a consumer transaction.
(23) "Consumer goods" means goods that are used or bought for use
primarily for personal, family, or household purposes.
(24) "Consumer-goods transaction" means a consumer transaction in
which:
(A) an individual incurs an obligation primarily for personal, family, or
household purposes; and
(B) a security interest in consumer goods secures the obligation.
(25) "Consumer obligor" means an obligor who is an individual and
who incurred the obligation as part of a transaction entered into
primarily for personal, family, or household purposes.
(26) "Consumer transaction" means a transaction in which (i) an
individual incurs an obligation primarily for personal, family, or
household purposes, (ii) a security interest secures the obligation, and
(iii) the collateral is held or acquired primarily for personal, family, or
household purposes. The term includes consumer-goods transactions.
(27) "Continuation statement" means an amendment of a financing
statement which:
(A) identifies, by its file number, the initial financing statement to
which it relates; and
(B) indicates that it is a continuation statement for, or that it is filed to
continue the effectiveness of, the identified financing statement.
(28) "Debtor" means:
(A) a person having an interest, other than a security interest or other
lien, in the collateral, whether or not the person is an obligor;
(B) a seller of accounts, chattel paper, payment intangibles, or
promissory notes; or
(C) a consignee.
(29) "Deposit account" means a demand, time, savings, passbook, or
similar account maintained with a bank. The term does not include
investment property or accounts evidenced by an instrument.
(30) "Document" means a document of title or a receipt of the type
described in Section 7-201(2).
(31) "Electronic chattel paper" means chattel paper evidenced by a
record or records consisting of information stored in an electronic
medium.
(32) "Encumbrance" means a right, other than an ownership interest,
in real property. The term includes mortgages and other liens on real
property.
(33) "Equipment" means goods other than inventory, farm products, or
consumer goods.
(34) "Farm products" means goods, other than standing timber, with
respect to which the debtor is engaged in a farming operation and which
are:
(A) crops grown, growing, or to be grown, including:
(i) crops produced on trees, vines, and bushes; and
(ii) aquatic goods produced in aquacultural operations;
(B) livestock, born or unborn, including aquatic goods produced in
aquacultural operations;
(C) supplies used or produced in a farming operation; or
(D) products of crops or livestock in their unmanufactured states.
(35) "Farming operation" means raising, cultivating, propagating,
fattening, grazing, or any other farming, livestock, or aquacultural
operation.
(36) "File number" means the number assigned to an initial financing
statement pursuant to Section 9-519(a).
(37) "Filing office" means an office designated in Section 9-501 as the
place to file a financing statement.
(38) "Filing-office rule" means a rule adopted pursuant to Section 9526.
(39) "Financing statement" means a record or records composed of an
initial financing statement and any filed record relating to the initial
financing statement.
(40) "Fixture filing" means the filing of a financing statement covering
goods that are or are to become fixtures and satisfying Section 9-502(a)
and (b). The term includes the filing of a financing statement covering
goods of a transmitting utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related to particular
real property that an interest in them arises under real property law.
(42) "General intangible" means any personal property, including
things in action, other than accounts, chattel paper, commercial tort
claims, deposit accounts, documents, goods, instruments, investment
property, letter-of-credit rights, letters of credit, money, and oil, gas, or
other minerals before extraction. The term includes payment intangibles
and software.
(43) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(44) "Goods" means all things that are movable when a security interest
attaches. The term includes (i) fixtures, (ii) standing timber that is to be
cut and removed under a conveyance or contract for sale, (iii) the
unborn young of animals, (iv) crops grown, growing, or to be grown,
even if the crops are produced on trees, vines, or bushes, and (v)
manufactured homes. The term also includes a computer program
embedded in goods and any supporting information provided in
connection with a transaction relating to the program if (i) the program
is associated with the goods in such a manner that it customarily is
considered part of the goods, or (ii) by becoming the owner of the goods,
a person acquires a right to use the program in connection with the
goods. The term does not include a computer program embedded in
goods that consist solely of the medium in which the program is
embedded. The term also does not include accounts, chattel paper,
commercial tort claims, deposit accounts, documents, general intangibles,
instruments, investment property, letter-of-credit rights, letters of credit,
money, or oil, gas, or other minerals before extraction.
(45) "Governmental unit" means a subdivision, agency, department,
county, parish, municipality, or other unit of the government of the
United States, a State, or a foreign country. The term includes an
organization having a separate corporate existence if the organization is
eligible to issue debt on which interest is exempt from income taxation
under the laws of the United States.
(46) "Health-care-insurance receivable" means an interest in or
claim under a policy of insurance which is a right to payment of a
monetary obligation for health-care goods or services provided.
(47) "Instrument" means a negotiable instrument or any other writing
that evidences a right to the payment of a monetary obligation, is not
itself a security agreement or lease, and is of a type that in ordinary
course of business is transferred by delivery with any necessary
indorsement or assignment. The term does not include (i) investment
property, (ii) letters of credit, or (iii) writings that evidence a right to
payment arising out of the use of a credit or charge card or information
contained on or for use with the card.
(48) "Inventory" means goods, other than farm products, which:
(A) are leased by a person as lessor;
(B) are held by a person for sale or lease or to be furnished under a
contract of service;
(C) are furnished by a person under a contract of service; or
(D) consist of raw materials, work in process, or materials used or
consumed in a business.
(49) "Investment property" means a security, whether certificated or
uncertificated, security entitlement, securities account, commodity
contract, or commodity account.
(50) "Jurisdiction of organization", with respect to a registered
organization, means the jurisdiction under whose law the organization is
organized.
(51) "Letter-of-credit right" means a right to payment or performance
under a letter of credit, whether or not the beneficiary has demanded or
is at the time entitled to demand payment or performance. The term
does not include the right of a beneficiary to demand payment or
performance under a letter of credit.
(52) "Lien creditor" means:
(A) a creditor that has acquired a lien on the property involved by
attachment, levy, or the like;
(B) an assignee for benefit of creditors from the time of assignment;
(C) a trustee in bankruptcy from the date of the filing of the petition;
or
(D) a receiver in equity from the time of appointment.
(53) "Manufactured home" means a structure, transportable in one or
more sections, which, in the traveling mode, is eight body feet or more
in width or 40 body feet or more in length, or, when erected on site, is
320 or more square feet, and which is built on a permanent chassis and
designed to be used as a dwelling with or without a permanent
foundation when connected to the required utilities, and includes the
plumbing, heating, air-conditioning, and electrical systems contained
therein. The term includes any structure that meets all of the
requirements of this paragraph except the size requirements and with
respect to which the manufacturer voluntarily files a certification
required by the United States Secretary of Housing and Urban
Development and complies with the standards established under Title 42
of the United States Code.
(54) "Manufactured-home transaction" means a secured transaction:
(A) that creates a purchase-money security interest in a manufactured
home, other than a manufactured home held as inventory; or
(B) in which a manufactured home, other than a manufactured home
held as inventory, is the primary collateral.
(55) "Mortgage" means a consensual interest in real property, including
fixtures, which secures payment or performance of an obligation.
(56) "New debtor" means a person that becomes bound as debtor
under Section 9-203(d) by a security agreement previously entered into
by another person.
(57) "New value" means (i) money, (ii) money's worth in property,
services, or new credit, or (iii) release by a transferee of an interest in
property previously transferred to the transferee. The term does not
include an obligation substituted for another obligation.
(58) "Noncash proceeds" means proceeds other than cash proceeds.
(59) "Obligor" means a person that, with respect to an obligation
secured by a security interest in or an agricultural lien on the collateral,
(i) owes payment or other performance of the obligation, (ii) has
provided property other than the collateral to secure payment or other
performance of the obligation, or (iii) is otherwise accountable in whole
or in part for payment or other performance of the obligation. The term
does not include issuers or nominated persons under a letter of credit.
(60) "Original debtor", except as used in Section 9-310(c), means a
person that, as debtor, entered into a security agreement to which a new
debtor has become bound under Section 9-203(d).
(61) "Payment intangible" means a general intangible under which the
account debtor's principal obligation is a monetary obligation.
(62) "Person related to", with respect to an individual, means:
(A) the spouse of the individual;
(B) a brother, brother-in-law, sister, or sister-in-law of the individual;
(C) an ancestor or lineal descendant of the individual or the
individual's spouse; or
(D) any other relative, by blood or marriage, of the individual or the
individual's spouse who shares the same home with the individual.
(63) "Person related to", with respect to an organization, means:
(A) a person directly or indirectly controlling, controlled by, or under
common control with the organization;
(B) an officer or director of, or a person performing similar functions
with respect to, the organization;
(C) an officer or director of, or a person performing similar functions
with respect to, a person described in subparagraph (A);
(D) the spouse of an individual described in subparagraph (A), (B), or
(C); or
(E) an individual who is related by blood or marriage to an individual
described in subparagraph (A), (B), (C), or (D) and shares the same
home with the individual.
(64) "Proceeds", except as used in Section 9-609(b), means the
following property:
(A) whatever is acquired upon the sale, lease, license, exchange, or
other disposition of collateral;
(B) whatever is collected on, or distributed on account of, collateral;
(C) rights arising out of collateral;
(D) to the extent of the value of collateral, claims arising out of the
loss, nonconformity, or interference with the use of, defects or
infringement of rights in, or damage to, the collateral; or
(E) to the extent of the value of collateral and to the extent payable to
the debtor or the secured party, insurance payable by reason of the
loss or nonconformity of, defects or infringement of rights in, or
damage to, the collateral.
(65) "Promissory note" means an instrument that evidences a promise
to pay a monetary obligation, does not evidence an order to pay, and
does not contain an acknowledgment by a bank that the bank has
received for deposit a sum of money or funds.
(66) "Proposal" means a record authenticated by a secured party which
includes the terms on which the secured party is willing to accept
collateral in full or partial satisfaction of the obligation it secures
pursuant to Sections 9-620, 9-621, and 9-622.
(67) "Public-finance transaction" means a secured transaction in
connection with which:
(A) debt securities are issued;
(B) all or a portion of the securities issued have an initial stated
maturity of at least 20 years; and
(C) the debtor, obligor, secured party, account debtor or other person
obligated on collateral, assignor or assignee of a secured obligation, or
assignor or assignee of a security interest is a State or a governmental
unit of a State.
(68) "Pursuant to commitment", with respect to an advance made or
other value given by a secured party, means pursuant to the secured
party's obligation, whether or not a subsequent event of default or other
event not within the secured party's control has relieved or may relieve
the secured party from its obligation.
(69) "Record", except as used in "for record", "of record", "record or
legal title", and "record owner", means information that is inscribed on a
tangible medium or which is stored in an electronic or other medium and
is retrievable in perceivable form.
(70) "Registered organization" means an organization organized
solely under the law of a single State or the United States and as to
which the State or the United States must maintain a public record
showing the organization to have been organized.
(71) "Secondary obligor" means an obligor to the extent that:
(A) the obligor's obligation is secondary; or
(B) the obligor has a right of recourse with respect to an obligation
secured by collateral against the debtor, another obligor, or property
of either.
(72) "Secured party" means:
(A) a person in whose favor a security interest is created or provided
for under a security agreement, whether or not any obligation to be
secured is outstanding;
(B) a person that holds an agricultural lien;
(C) a consignor;
(D) a person to which accounts, chattel paper, payment intangibles, or
promissory notes have been sold;
(E) a trustee, indenture trustee, agent, collateral agent, or other
representative in whose favor a security interest or agricultural lien is
created or provided for; or
(F) a person that holds a security interest arising under Section 2-401,
2-505, 2-711(3), 2A-508(5), 4-210, or 5-118.
(73) "Security agreement" means an agreement that creates or
provides for a security interest.
(74) "Send", in connection with a record or notification, means:
(A) to deposit in the mail, deliver for transmission, or transmit by any
other usual means of communication, with postage or cost of
transmission provided for, addressed to any address reasonable under
the circumstances; or
(B) to cause the record or notification to be received within the time
that it would have been received if properly sent under subparagraph
(A).
(75) "Software" means a computer program and any supporting
information provided in connection with a transaction relating to the
program. The term does not include a computer program that is included
in the definition of goods.
(76) "State" means a State of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any territory
or insular possession subject to the jurisdiction of the United States.
(77) "Supporting obligation" means a letter-of-credit right or
secondary obligation that supports the payment or performance of an
account, chattel paper, a document, a general intangible, an instrument,
or investment property.
(78) "Tangible chattel paper" means chattel paper evidenced by a
record or records consisting of information that is inscribed on a tangible
medium.
(79) "Termination statement" means an amendment of a financing
statement which:
(A) identifies, by its file number, the initial financing statement to
which it relates; and
(B) indicates either that it is a termination statement or that the
identified financing statement is no longer effective.
(80) "Transmitting utility" means a person primarily engaged in the
business of:
(A) operating a railroad, subway, street railway, or trolley bus;
(B) transmitting communications electrically, electromagnetically, or
by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting electricity, steam, gas,
or water.