La. Admin. Code tit. 7 § III-125

Current through Register Vol. 50, No. 11, November 20, 2024

Section III-125 - Causes for Termination of Loan Purchase Agreement

A. LAFA may terminate a loan purchase agreement with any lender in any of the following circumstances:

1. lenders failure to pay loan note repayments over to the trustee if such failure continues for a period of five days;

2. lenders failure to observe or perform in any material respect any other covenant or condition of a loan purchase agreement for more than 30 days after receipt of written notice thereof from LAFA or the trustee. Prior to the expiration of such period, LAFA may extend the period by written authorization. If the failure stated in the notice cannot be corrected within 30 days, LAFA will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the lender within the applicable period;

3. if any representation of or warranty by lender to LAFA is false in any material respect and LAFA has notice thereof;

4. the issuance of an order against the lender by any court or other supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver, or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities, or liquidation of lender's affairs which remains in force undischarged or unstated for a period of 60 days;

5. lender's consent to the appointment of a conservator, receiver, or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities, or similar proceedings relating to lender or all or substantially all of its property;

6. lender's admission, in writing, of its inability to pay its debts generally as they become due, filing of a petition to take advantage of any applicable insolvency or reorganization statute, making an assignment for the benefit of its creditors, or voluntarily suspending payment of its obligations.

B. In any of the circumstances enumerated in §125 A, LAFA or the trustee, on LAFA's behalf, may take one or both of the following steps:

1. make written demand on the lender for lender's repurchase of the unpaid portion of the loan note at a price equal to the unpaid principal plus any interest which has accrued and is unpaid as of the date of repurchase. Such demand shall be made when the lender fails for more than five days to pay over to the trustee the proceeds of loan note repayments;

2. take whatever other action at law or in equity may appear necessary or desirable to collect any amounts due or to become due under the loan purchase agreement or to enforce performance and observance of a loan purchase agreement, including actions for costs of legal fees and other expenses incurred in such actions. Any amounts collected pursuant to action taken under this rule shall be deposited in the bond fund.

C. No delay or omission in exercising the remedies set forth above shall impair any right or be construed to be a waiver thereof; such remedies may be exercised from time to time, as often as may be deemed expedient, without any notice other than the notice required by this rule.

La. Admin. Code tit. 7, § III-125

Promulgated by the Department of Agriculture, Agricultural Finance Authority, LR 10:871 (November 1984).

AUTHORITY NOTE: Promulgated in accordance with R.S. 3:266, R.S. 3:270 and Section 103(b)(6) of the Internal Revenue Code of 1954, as amended.